Central Bank warns of 110,000 fewer jobs in event of no-deal Brexit
Mark Cassidy, director of economics and statistics, was speaking at an Oireachtas committee.
A disorderly no-deal Brexit would result in 110,000 fewer jobs in Ireland, the Central Bank has warned.
Mark Cassidy, director of economics and statistics at the bank, said the effect of the UK crashing out of the EU would be severe and result in a permanent loss of economic output.
He said if a deal could be secured, the negative effects of Brexit could be “contained”.
We think there would be 110,000 fewer jobs compared to a situation where there had been no Brexit Mark Cassidy, Central Bank
But he said the impact of a disorderly, no-deal scenario would “have very severe and immediate disruptive effects with consequences for almost all areas of economic activity”.
“Compared to a situation where the UK remains a EU member, our estimates suggest that a disorderly Brexit would result in a substantial and permanent loss of output,” he told an Oireachtas committee.
Mr Cassidy added: “We think that the disorderly, no-deal scenario could knock about four percentage points off economic growth in the first year alone.
“To put that in context, we’re expecting economic growth of 4.25% this year, 3.5% next year.
“So we would still expect some modest positive growth in a no-deal scenario but essentially it would knock almost all of the growth off in the first couple of years.”
Over the medium-term, Mr Cassidy said he believed output would be lowered by over 6% compared to a no-deal scenario.
“We think there would be 110,000 fewer jobs compared to a situation where there had been no Brexit, so the effects are immediate,” he concluded.
In comparison, Mr Cassidy said if a deal similar to the Withdrawal Agreement could be reached, then the Central Bank expected output would be 1.75% less than predicted and it would result in 20,000 fewer jobs.
Mr Cassidy made the comments during an appearance at the Seanad Special Select Committee On The Withdrawal Of The UK From The EU on Wednesday in response to Labour Party senator Ged Nash, who asked the Central Bank economist to be frank about the loss of output he expected to see in the event of the UK crashing out of the EU.
“What are we facing as an economy and a society in the event of a no-deal Brexit?” Mr Nash asked.
“The reality is that, whether we like it or not, given the political climate in Britain at the moment we could very well be staring down the barrel of a no-deal Brexit.”
Independent senator Gerard Craughwell said he could not see any way in which an open border could be maintained in the event of a hard Brexit.
“I cannot see a way, anyway, that we can have an open border,” he said.
“I’ve never been able to see it, nobody has ever explained to me how to have an open border with a third country in particular if there’s a hard crash out.”
He added: “All we need is one carcass of beef to finish up in Berlin or Paris that is not true Irish beef that has something like angel dust in it and our entire market collapses in Europe which is about 60% of our beef market. So that’s a very serious concern.”