Ibec says the Government needs to step up its pandemic budget plans and to develop more a more ambitious long-term investment plan and social contract. The call came as Ireland faced its second major economic crisis in less than a decade and one that could leave a long shadow of shuttered businesses and workers without jobs due to the impact of the coronavirus lockdown.

“While economic dislocation has been sudden, its full impact has not yet been felt and is likely to last for years,” said chief executive of Ibec Danny McCoy. “Government must do whatever it takes to offset the significant economic shock of Covid-19,” Ibec said. It called for the State to expand its primary deficit by one percentage point for every percentage point by which the economy is expected to shrink.

The first step, the industry group said, was to boost Government spending with new measures equal to around €15bn in addition to the money already allocated.

While the Government recently stepped in with support for businesses to ensure that as many as possible survive and are in position to start investing and hiring again, Ibec noted the scale of public supports to address the liquidity crisis in businesses was “far behind those in most other countries”.

“Further measures such as low or zero-cost loans, export credit insurance and extended state guaranteed loans are urgently required,” it said.

The call from Ibec came as the Government mapped a tentative path to reopening the economy – starting on May 18 and running in phases for businesses where health risks are greater. However, the opening of some economies that initially appeared to have experienced a relatively low rate of deaths such as South Korea and Germany, was accompanied by a spike in infections that many feared was the start of a second wave of coronavirus.

The easing of restrictions in other countries has not led to a rapid economic recovery, according to data from Austria and Denmark which shows that people are staying away from public transport and areas that used to be crowded. Ireland’s worst-affected sectors are in food and accommodation. The number of people unemployed or dependent on the State in some form for their income is now 1.1 million – around half the workforce.

A survey by Ibec of 550 chief executives showed that almost three quarters expected to see pre-Covid business levels up to a year after the lockdown restrictions end and that 41pc of those surveyed had laid off workers or put them on short-term working.However, around half of the businesses say they will not have returned to pre-crisis levels of staffing by the end of the year. One in ten CEOs expected “substantial decreases in staffing levels”.