Economic impact of Brexit on Ireland will be 'negative and material', central bank warns
The exact economic impact of Brexit on Ireland will be "negative and material," both in the short-term and in the longer term, according to the deputy governor of the Central Bank.
Speaking at an event in Dublin organised by the Global Interdependence Center, Sharon Donnery, said the long-run economic impact of Brexit is difficult to estimate with any precision, but, she said it is clear that the impact will be negative for Ireland.
Stripping out headline economic statistics, she said growth here was approximately 5pc.
She admitted that low interest rates set by the European Central Bank (ECB) in Frankfurt are not being passed on to Irish retail and SME borrowers.
Irish SME borrowing costs remain stubbornly high, she said.
The deputy governor blamed bad loads still sitting on bank balance sheets, eight years after the Crash, at least in part for high debt cost here.
"Non-performing loans contribute to banks’ balance sheet fragility, impinge on profitability and strain capital buffers, impeding bank lending. Therefore, the continued deliberate and determined work-out of NPLs coupled with ongoing improvements in the Irish economy, will reduce the burden they pose and support the extension of new loans to the real economy," she said.
Despite massive efforts by the ECB to boost credit in Europe, credit volumes here continue to decline.