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No-deal Brexit will hit Republic of Ireland economy, warns report

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The Central Bank of Ireland believes that in the event agreement cannot be reached, the economy in the Republic will be 4.9% smaller by 2028 than it would have been had the UK stayed in the European Union and unemployment will surge by more than 1.6% (stock photo)

The Central Bank of Ireland believes that in the event agreement cannot be reached, the economy in the Republic will be 4.9% smaller by 2028 than it would have been had the UK stayed in the European Union and unemployment will surge by more than 1.6% (stock photo)

The Central Bank of Ireland believes that in the event agreement cannot be reached, the economy in the Republic will be 4.9% smaller by 2028 than it would have been had the UK stayed in the European Union and unemployment will surge by more than 1.6% (stock photo)

There will be a huge hit to the economy in the Republic if the UK fails to conclude a free trade agreement in the 11 months that remain of London's self-imposed deadline, a new report has claimed.

The Central Bank of Ireland believes that in the event agreement cannot be reached, the economy in the Republic will be 4.9% smaller by 2028 than it would have been had the UK stayed in the European Union and unemployment will surge by more than 1.6%.

"The 11-month time-frame to conclude an EU-UK FTA is ambitious when benchmarked against the typical duration of successful trade negotiations between countries and trading blocs in the past," economists Thomas Conefrey and Graeme Walsh wrote in a report.

Those figures are the equivalent of £8bn (€9.5bn), based on 2018 data, and 90,000 jobs fewer than there would have been had the UK remained an EU member.

Even in the event of an EU-UK free trade agreement being signed in the talks with the EU, led by Michel Barnier, Irish output would fall by around 3.5% in the long run, the economists wrote.

"In each scenario the impact of Brexit is initially transmitted to the Irish economy via the traded sector," they added.

"The reduction in traded sector output would arise due to the fall in demand for Irish exports."

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