Minister for Finance Paschal Donohoe has warned that unemployment is projected to hit more than one in five Irish people.
In a briefing on Tuesday afternoon, Donohoe admitted that Ireland is currently in the grips of a very severe recession as a result of the Covid-19 pandemic crisis.
Among the government's projections for this year are a 22% unemployment rate, as well as a deficit of €23 billion.
The previous all-time high for Irish unemployment was around 17.3% in 1985. It climbed as high as 16% in the aftermath of the 2008 financial crisis.
Prior to the outbreak of coronavirus, unemployment in Ireland had been around 4%. At present, the Department of Social Protection estimates that 584,000 people have applied for the increased Covid-19 welfare payment.
Donohoe stressed, however, that uncertainty around coronavirus meant the government's Stability Programme Update 2020 is "a scenario, rather than a forecast".
"We now expect GDP to contract by around 10.5% this year. We are clearly now in the midst of a severe recession both domestically and globally," he said.
The report assumes that current "containment measures" will remain in place for 12 weeks and will gradually be lifted. Donohoe noted that if these measures are in place for longer, then the economic impact will be more "severe".
"Once the pandemic is contained, we will recover," Donohoe noted.
He further laid out the projection that it will be 2022 before the Irish economy begins to resemble its pre-Covid-19 state.
