Ireland poised to grow as UK importer should Britain stay in the EU
British imports into Ireland are set to increase by €26bn over the next ten years provided Britain stay within the EU, a new report has shown.
In ongoing Brexit commentary much of the Irish coverage has been given to the UK as an export destination for Ireland. However, the UK relies heavily on Ireland too, standing as its fifth largest exporting country.
According to the Barclays Trade Forecast, British imports are set to increase by 66pc between 2016 and 2026, bringing the total value up to €66bn.
The bank made its predictions on the premise that trade regulations remain the same and that a Brexit vote doesn't carry through.
Barclays Bank Ireland head of client coverage Helen Kelly said Ireland is a key market for the UK.
"Each week, over €1bn of trade is conducted between Ireland and the UK, highlighting the huge economic significance of the two markets to each other," Ms Kelly said.
This year the bank predicts Irish imports from the UK to top €40bn, which would represent 17pc increase in exports since 2006.
"While the US is set to remain the UK's largest individual trading partner and emerging markets such as China and India are set to become key export destinations for UK goods and services in the future, trade with Ireland is at all-time record level and is projected to grow considerably over the next ten years," Ms Kelly added. Ireland's biggest import of UK goods is in mineral fuels, oils and distillation products, which amount to €4.04bn.
Imports of UK dairy products is an area that has seen significant growth over the last number of years and Ireland now amounts for 32.2pc of all dairy exports from the UK.
As an import destination of UK goods and services Ireland sits behind the US, Germany, the Netherlands, and France.
Its position as an importer of services is expected to change however. According to Barclays, UK service imports to Ireland could overtake goods for the first time within the next ten years.
The increase in services is to be driven by an Irish demand for financial and business services links.
Ms Kelly believes Ireland's current position as a financial services hub will grow the need for UK imports in the area.
"Financial services will be the UK's single largest export sector in 2026 and given Ireland's well established positioning as a global hub for financial services, it is certain to provide greater trade opportunities going forward."
Ireland is aware of a potential influx of financial services with the IDA courting firms that are considering "what if" scenarios.
On the flip side Irish firms exporting into the UK are at the mercy of the British electorate.
In 2014 Ireland exported €20bn worth of services to the UK and a further €14m in goods.
The weakening of the sterling has made it more expensive for the UK to import Irish goods; as a result Irish businesses have gotten a taste of what it may be like should a Brexit carry through.
In May business lobby group Ibec warned that Irish companies could become as much as 30pc less competitive in the UK market.
A potential special trade deal between the two countries has been touted should Britain decide to leave and last week a member of the German parliament's finance committee said such a deal could be agreed.