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Brexit will inflict negative blow to economy, states Central Bank

Published 27/07/2016

Theresa May and Enda Kenny met to discuss the implications of Brexit
Theresa May and Enda Kenny met to discuss the implications of Brexit

Brexit will inflict a "negative and material" blow to Ireland's economy, the Central Bank has forecast.

Britain's decision to pull out of the European Union will wreak both short-term and long-term harm to Irish fortunes, it said.

Farmers, food producers, the tourism industry and clothing traders - who depend more heavily on business with the UK - are set to be the worst hit, it has predicted.

In its latest quarterly report, the Central Bank said it was difficult to accurately quantify the scale of the impact of last month's shock referendum vote.

But it has downgraded its forecast for economic growth by 0.2% to 4.9% this year, and by 0.6% to 3.6% next year.

Despite this, Ireland should remain the fastest growing economy in Europe.

"Notwithstanding these downward revisions, the outlook for the Irish economy remains broadly favourable, with unemployment set to continue to fall further," the bulletin said.

"However, risks to the projections are clearly weighted to the downside, reflecting the possibility of a more adverse impact on the UK economy, a larger spill-over to the broader international economy or the potential for more negative domestic confidence and labour market effects than incorporated in the forecasts."

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