The final cost of December's big freeze will be close to €1.5bn, according to a leading economist.

The figure includes insurance payouts, infrastructural repairs and losses to businesses, said Jim Power, chief economist with Friends First.

"Last December was supposed to be when Irish retailers got the massive boost that they really needed," he said. "We saw from figures released last week the massive hit that retailers took over the Christmas period because of the weather. We haven't seen just yet exactly what impact this has had on the restaurant sector but it is likely to be similarly huge."

CSO figures released last week showed the volume of retail sales last month was 3.6% lower than a year earlier.

Monthly figures, excluding car sales, showed a 2.5% decline in volume between November and December, and a value drop of 1.3%. The monthly drop was the largest recorded since 2003.

"The problem is that there will be no redeeming those losses", Power said, "It was supposed to be a massive time for the industry and they can't claim it back. The next issue arising from the big freeze is the damage to infrastructure. The roads were still not fully repaired from the damage caused by the big freeze at the start of last year so it is a major problem. I have travelled around a lot of Ireland in the last few months and there is still substantial damage which has yet to be repaired. Because of this, it is looking like the overall cost of the big freeze of 2010 will end up costing up to €1.5bn."

Power said the final figure included insurance payouts, which are likely to exceed €300m alone, as well as expenses such as a likely hike in insurance premiums.

"It also factors in the job losses in the retail and restaurant industry and the fall in profit they have experienced.

Power said another big freeze in 2011 would be financially crippling for the country. "When you take that sort of money out of an economy in serious trouble it is not good news. Because of this, if another big freeze were to come, we will not be economically ready, let alone ready in general."