Tuesday 6 December 2016

Irish economy to take hit post-Brexit, UK may enter recession - NTMA

Published 07/07/2016 | 11:34

National Treasury Management Agency (NTMA) chief executive Conor O'Kelly. Photo: Frank McGrath
National Treasury Management Agency (NTMA) chief executive Conor O'Kelly. Photo: Frank McGrath

Ireland is likely to suffer an economic hit from Brexit, the National Treasury Management Agency (NTMA) has warned.

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In a presentation aimed at investors in the bond markets, who lend to the State, the agency that manages the country's debt said Irish banks can expect to suffer because of their operations in Britain.

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The agency said a recession in the UK in the wake of the Brexit vote last month would likely spread to Ireland, slowing growth here by next year.

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“The UK may enter recession after its vote to leave the EU: if UK GDP drops by 1pc, Ireland’s may fall by 0.3pc to 0.8pc. The arithmetic “carryover” in 2016 helps, so 2017 sees the impact. The Minister for Finance has cut the Government’s 2017 GDP forecast to 3.4pc from 4.2pc.”

The Irish economy is growing faster than every other euro area country, and growth is broad based and strong, the NTMA said.

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