(Shutterstock)A study by Ireland’s Economic and Social Research Institute and the Irish Department of Finance looks at how different Brexit scenarios will impact on Ireland’s economy. Anna Tobin looks at the conclusions
The study entitled Ireland and Brexit: modelling the impact of deal and no-deal scenarios looks at how Brexit could impact on the Irish economy by assessing the impact on trade and the potentially positive impact of foreign direct investment being diverted to Ireland from the UK.
It concludes that Brexit could impact on Ireland’s future GDP and it found that where a deal is reached, GDP in Ireland a decade after Brexit will be around 2.6% lower than if the UK remains in the EU. In a no-deal scenario GDP is expected to be 4.8% lower and in a disorderly no-deal Brexit it is predicted to be 5% lower.
Brexit is also expected to have a negative effect on employment in Ireland, compared to where the UK remains in the EU. In the long run, the report predicts that employment will be 1.8% lower in a deal scenario, 3.2% lower in a no-deal scenario and 3.4% lower in a disorderly no-deal scenario.
The report defines a deal scenario as “where the UK makes an orderly agreed exit from the EU. This involves a transition period to the end of 2020, and a free trade agreement between the UK and the EU-27 being in place thereafter.” It defines a no-deal scenario, as where “the UK exits the EU without a deal but there is an orderly period of adjustment for trade. Ultimately, WTO tariff arrangements will apply to goods trade, there will be non-tariff measures, and services trade will also be negatively impacted.” And, it defines a disorderly no-deal scenario, as where: “the UK exits the EU without a deal and there is an additional disruption to trade in the short-run, above that considered in the no-deal scenario.”
Adele Bergin, the lead author of the report, commented: “The impact of each Brexit scenario is considerable and will have negative effects throughout the economy on the household sector, the labour market, firms and the public finances. However, the negative impact on Irish output in the long run in the deal scenario is approximately half that of the no-deal scenario.”
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