ERSI Estimates Irish GDP To Fall Regardless Of Brexit Outcome
A new study from the Economic and Social Research Institute (ESRI) and the Department of Finance finds that GDP in Ireland ten years after Brexit will have fallen regardless of the outcome.
The report estimates Ireland's GDP to be around 2.6% lower in a Deal scenario, 4.8% lower in a No-Deal scenario and 5% lower in a Disorderly No-Deal scenario respectively, compared to a situation where the UK stays in the EU.
The ERSI said that the findings imply a slower pace of growth with negative consequences throughout the economy.
Long-Term Negative Impact
“The impact of each Brexit scenario is considerable and will have negative effects throughout the economy on the household sector, the labour market, firms, and the public finances,” Adele Bergin, lead author of the report, said.
“However, the negative impact on Irish output in the long run in the Deal scenario is approximately half that of the No-Deal scenario.”
Results indicate that by 2020, the level of real output in the Irish economy would be 0.6%, 1.2%, and 2.4% lower in the Deal, No-Deal and Disorderly No-Deal scenarios, respectively.
It also added that, in the long-run, employment would be 1.8% lower in a Deal scenario, 3.2% lower in a No-Deal scenario and 3.4% lower in a Disorderly No-Deal scenario respectively, compared to a situation where the UK stays in the EU.
The research suggested that Ireland might benefit from the relocation or diversion of Foreign Direct Investment (FDI) from the UK which would raise GDP.
However, it admitted that while the FDI effect is expected to have a positive effect on Ireland, the positive impact is outweighed by the negative trade effect.
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