Thus, whatever governments do, consumers’ tourism expenditure will not return to normal this year. The fact that consumers’ behaviour is greatly affected by perceptions of safety means that a fiscal stimulus to encourage consumption this summer is doomed to failure. Giving households more money to spend, or reducing taxes to encourage consumption, would be a complete waste of money. This confirms the fact that households’ fears about the virus are at least as important as restrictions in driving expenditure. Their consumption is stabilising at 13 per cent below normal, whereas for low-income households the reduction in expenditure and the rise in savings is much smaller.

Source: The Irish Times June 26, 2020 04:45 UTC