“We estimate the economy-wide hit from higher inflation could be over €4bn, or about €2,000 per household,” said Austin Hughes, chief economist at KBC.

Most consumers say they plan to cut back spending this year, and almost half suggest they will cut by a large amount.

Mr Hughes said the latest drop in consumer confidence here was the largest since April 2020, when the first of the Covid lockdowns was introduced.

“The Irish consumer is probably punch drunk after the financial crisis, Brexit, Covid, and now war in Ukraine,” said Mr Hughes.

The sentiment survey “signalled a marked change in thinking and suggests a material downgrade of the economic and financial outlook by Irish consumers”, according to KBC.

“The March survey saw a sharp worsening of the general economic outlook and a similarly large weakening in consumers thinking on the prospects for their own household finances that likely reflects notably increased inflation fears,” according to the survey.

However, consumers are still confident about the outlook for jobs, according to the KBC survey. That chimes with most major economic surveys that project the economy will grow strongly, employment levels will rise, and unemployment will fall this year, even as inflation surges.

The ESRI this week projected that consumer price inflation will peak in early summer at 8.5% — up from 5.6% last month — before moderating. Irish inflation remains hugely elevated, at 5% in 2023, it forecast.

The think-tank said that although the Ukraine war has ratcheted up the risks, the economy will nonetheless expand rapidly this year and in 2023, as long as there are no new major shocks to the supply of energy to global markets.

The economy will expand 6.2% this year and by 4.3% in 2023, in GDP terms, the ESRI has projected. It also said the public finances had emerged from the Covid crisis in good shape.