Hard Brexit will lead to 40,000 job losses in Ireland, economist warns
Around 40,000 people will lose their jobs in Ireland because of Theresa May's hard Brexit plan, the Irish government's chief economist has warned.
Exports to the UK are set to nosedive by nearly a third and 20 billion euro will be heaped on to Ireland's national debt over the coming decade, it is also predicted.
John McCarthy, chief economist at Dublin's Department of Finance, said much of the pain will be front-loaded over the coming five years but the fallout would continue afterwards.
The senior Government official said the dire forecast was based on extensive economic modelling carried out by his own department and the Economic and Social Research Institute, a leading think tank.
"There is a health warning to all models but I think the figures are reasonable," he said.
Mr McCarthy, giving evidence to a parliamentary committee in Dublin, said officials had been working on predictions for the financial fallout from Brexit for some time.
They had drawn up forecasts for three different scenarios - a soft, medium and hard Brexit.
"We know now that most likely scenario is a hard exit," he said, referring to the Prime Minister's speech on Tuesday laying out her blueprint for Britain's exit from the European Union.
"That would lead us to believe that the impact will be more severe," he said.
Worst hit will likely be those working in the food and drink industries, as well as others whose business relies heavily on exports to the UK which could be slapped with punitive trade tariffs.
Exports to the UK are expected to drop 30% - which would be the same as an overall 4% dip in all Ireland's overseas exports.
It is estimated that the Irish economy - based on the value of all goods and services in the country known as gross domestic product (GDP) - will plunge 3.5% over the coming five years.
It will dip further but less sharply in the following few years as a direct result of the planned hard Brexit, according to the official forecast.
Mr McCarthy also revealed that there are "maybe three or four staff" in the special unit set up by the Department of Finance to drive Ireland's response to Brexit.
"The co-ordinating unit is relatively small, I suppose, but every unit is feeding into that," he told the Oireachtas Finance Committee.
Opposition Fianna Fail finance spokesman Michael McGrath said he was shocked by the "threadbare" resources handed to the unit, given "the extremely serious threat posed to our economy by the hard Brexit scenario that is now emerging".
"It is shocking to learn that the Department of Finance's Brexit unit comprises just four people," he said.
"The Department of Finance is responsible for shaping our economic strategy and has a central role to play in designing and implementing our response to Brexit."
Mr McGrath said it was "becoming abundantly clear that our own government does not seem to fully grasp the scale of this challenge".