No-deal Brexit may punch '€18bn hole' in Irish economy
Ireland's economy could shrink by as much as €18bn in the coming decade in the event of a worst-case Brexit, economists warned yesterday.
With Britain's January 31 withdrawal date looming large, a no-deal Brexit remains possible, which would hit growth, jobs and wages here, according to a leading think tank.
UK prime minister Boris Johnson, pictured, has pledged there will be no talks beyond the end of this year and has threatened to walk away without any deal.
If that worst-case scenario comes about, the economy here could be up to €18bn smaller by 2030 than it would have been had the UK stayed inside the bloc, according to Copenhagen Economics.
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Even in the best scenario, in which UK regulations remain tied to Europe, the hit will be €7bn, said the report, which was commissioned by the Department of Business, Enterprise and Innovation.
"Irish exports and imports of goods and services are predicted to be negatively affected by Brexit in all scenarios analysed in this report," the consultancy said yesterday.
The economy has already dodged one Brexit bullet after a no-deal hit was averted at the end of 2019. The Department of Finance recently upgraded its growth forecast for this year to 3.9pc from 0.7pc as a result. Brexit will hit hardest in agriculture and foods, pharmaceuticals and chemicals, electric machinery, wholesale and retail, and air transport, Copenhagen Economics said.
Meanwhile, jobs and wages will suffer too.
"In the WTO [World Trade Organisation] scenario, our results show that real wages will be 8.7pc below the 2030 non-Brexit baseline level for low-skilled workers, while the equivalent negative effect for high-skilled workers will be 6.5pc," the report said.
For the more modest scenarios, wages will be 3.5pc lower for low-skill workers and 2.6pc lower than they otherwise would have been for high-skill workers had the UK stayed in the EU.
Job losses will be heaviest in food and agriculture, at 12,400 in the worst case, followed by a projected 6,400 in manufacturing, and a more modest 1,300 in wholesale and retail, plus air transport.
Jobs will grow in other service sectors and, for comparison, official data shows the economy added 53,700 jobs in the 12 months to the end of September.
The losses to the Irish economy in this study are at the higher end of the range of estimates, which put losses at 3.4pc to 9.4pc under a WTO scenario.
The losses to Ireland from Brexit are in fact larger than those for the UK, according to four out of seven studies.