A survey which measures how consumers feel about the economic outlook fell in February.
The consumer sentiment index, compiled by KBC and the ESRI, dropped to 44.2 from 49.6 in January.
The decline this month was predicted as consumers are traditionally more positive about buying household items in January.
The index fell to an all-time low of 39.6 in July last year. Austin Hughes of KBC Bank says the fall is as a result of a reduction in household spending following the new year sales and the arrival of Christmas credit card bills.
He adds that a much poorer outlook for the public finances may be forcing consumers to think about an even greater degree of belt-tightening than they had previously expected.
The economist says he is surprised that sentiment did not fall even further given a warning from the Taoiseach of a sharp drop in living standards.
