The KBC Bank consumer sentiment index climbed to 62.6 in July from 61.6 in May, leaving it around halfway between the 12-month high of 85.5 in January and the low of 42.6 in April.

Austin Hughes, chief economist at KBC Ireland, said it was too soon to say whether the slowdown in the recovery of the index was a temporary pause or a sign of more persistent problems.

"While there is a strong sense that we have moved past the worst in terms of dislocation, the relief that propelled the May and June surveys forward has been tempered by renewed concerns in regard to large and lasting damage to the outlook for activity and employment," Hughes said.

Consumers were less downbeat about their current situation, with the Index of Current Conditions improving to 82.6 from 77.5.

But in a sign of growing pessimism, only one in 20 consumers expect the economy to strengthen through the next 12 months compared to one in eight in June, the survey found.

The current level of the index is similar to that seen in mid-2013 when the economy was still struggling to shake off the severe impacts of the global financial crisis, Hughes said.

(Reporting by Conor Humphries; Editing by Toby Chopra)