Economy to grow despite Brexit
The AIB’s Chief Economist Mr Oliver Mangan warned of the challenges posted by Britain leaving the EU at the Post Brexit International and Cross Border Conference.
He noted there had been a ‘very strong recovery’ by the Irish economy, which was continuing the uncertainly around Brexit and which had been helped by the marked improvement in the global economy, particularly the Eurozone.
Prospects remained positive notwithstanding Brexit with the expectation that the economy will continue to grow by 3.5-5%.
The impact of Britain’s pending exit from the EU on the UK economy was no as dramatic as expected due to the global economy but growth has slowed.
The two main challenges now facing the Irish economy were the housing crisis and Bretix, he continued.
The UK accounted for 40% of exports for indigneous companies in the Republic of Ireland while the Irish Republic was the main export country for most SMEs in Northern Irelnad.
Economists from the ERSI had prepared modules for the effects of the different approaches which the UK could take on leaving the EU and estimated that a ‘soft Brexit’ would knock 2% off the Irish GDP while it could be 4% with ‘ hard Brexit’.
It’s not the UK leaving the EU or the Single Market which poses the biggest problems but leaving the Customs Union, he said, as Irish exporters would now have to comply with an additional raft of regulations.