DUBLIN, June 9 Irish consumer sentiment fell
sharply in May from a seven-year high the previous month, a
survey showed on Monday, with the authors pointing to recent
election debates on austerity as a possible trigger for the
The KBC Bank Ireland/ESRI Consumer Sentiment Index fell to
79.4 in May from 87.2 in April, which was the highest level
since Ireland's economy collapsed after a property bubble burst
The number of consumers who expect their personal finances
to worsen in the next 12 months climbed to 46 percent from 33
percent a month earlier, the survey said.
All five components of the survey declined in May, the first
time this has happened in 16 months.
Rising house prices and falling unemployment have helped
boost confidence since Ireland emerged from its European
Union-International Monetary Fund bailout late last year,
prompting government ministers to hint at an end to the
country's austerity programme.
But debates during an election campaign last month about new
water charges and whether the government can afford to start
easing off on austerity may have punctured the elation, the
survey's authors said.
"The size of the drop in sentiment last month is difficult
to explain. It may owe something to a tendency for data series
to throw up extreme outliers from time to time ," KBC Bank
Ireland chief economist Austin Hughes said.
"We also think the election campaign and concerns about
water charges and medical cards may have caused consumers to
take a gloomier view."
The authors said in recent months consumers had appeared to
become more optimistic due to improving news about the economy
rather than any marked improvement in their own circumstances,
which could make the improved sentiment fragile.
Economists polled by Reuters last month forecast gross
domestic product growth of 2.1 percent in 2014, up from a 0.3
percent contraction last year.
(Reporting by Conor Humphries Editing by Jeremy Gaunt)