Employers' group Ibec has said further "significant measures" will need to be taken by the Government over the coming months to protect businesses and households from the economic fallout of the Covid-19 outbreak.
In its latest quarterly economic report, Ibec says the impact of the virus is likely to last for a year or more.
Ibec claims Ireland's roadmap to reopening the economy is "more conservative" than almost all comparable countries.
The quarterly outlook says the duration of restrictions will determine the scale of the fall in economic activity.
Gerard Brady, chief economist with Ibec said the reopening of the economy should be brought forward to June, if at all possible.
"If you look at the lockdown across Europe, we're about 6 to 8 weeks more conservative versus our peers and that has an economic impact.
"If it is necessary (to delay opening) from a public health point of view, it means we're going to have a higher deficit, and more of the deficit will go towards lower tax revenue rather than using the money to boost the economy and get the economy back up and running."
Ibec also warns that high levels of youth unemployment may become an intractable problem.
The business group points out that the accommodation and hospitality sector is among the worst hit with an estimated 69% of workers in receipt of the Covid-19 payment.
It expects unemployment overall to remain high, only falling to 16% by the end of this year.
It urges the Government to only withdraw income supports gradually, or risk a wave of redundancies in companies still operating well below capacity.
Gerard Brady said there was an argument to extend the wage subsidy schemes to October and perhaps even longer for some sectors that will struggle to reopen with physical distancing in place.
"If you remove those supports too quickly, you risk making the downturn worse. It will be costly but the alternative is to pay more in unemployment," he said.
Latest Business stories
No decision made on future of pandemic payment
The Minister of State at the Department of Finance said no decision had been made on the future of the Pandemic Unemployment Payment.
Speaking on RTÉ's Today with Sarah McInerney, Patrick O'Donovan said the matter will be discussed by Cabinet later this week.
He said the scheme has always been pencilled for review in the middle of June and added that it is "a bit early" to speculate on how the Government will react because the CSO and Exchequer figures only came in yesterday.
However, he also said that the situation going forward is "simply not sustainable".
Sinn Féin's finance spokesperson Pearse Doherty said that while no one is arguing the PUP should be there indefinitely, he said "certainty needs to be provided to individuals" that their payment will be continued.
Speaking on the same programme, he said that if the payment is tapered it will lead to mortgage arrears and people wondering how they will put food on the table.
"It is simply not acceptable and not what is needed in the economy," the Donegal TD said.
He said no certainty has been provided by the Government on this and said sustaining these payments until the end of the year would play a major role in the recovery of our economy.
Mr Doherty estimated that it would cost €4.1 billion to continue these payments until the end of the year.
Also speaking on the Today programme, the Director of Employer Relations with Ibec said Ireland was lagging behind our European neighbours in terms of getting businesses open.
Maeve McElwee said clarity around the public health guidance and why Ireland is moving at a different pace to other European countries is needed.
She said that longer restrictions may suppress the virus a bit longer but may also result a much deeper economic recession, which also presents health challenges.