Ireland’s economy will grow by 4% this year and 2.7% next year, but a no deal Brexit could impact that, according to an Irish business lobby group. Ibec’s Q3 Quarterly Economic Outlook states that Irish households have benefitted from strong growth over the past few years, which has increased incomes. It states that economic growth – measured in Gross domestic product (GDP) – is slowing down, with the economy forecast to grow by 2.7% next year. These forecasts are based on the assumption that a deal on Brexit is reached, and Britain doesn’t go crashing out of Europe on 31 October. Ibec states in the event of a no-deal Brexit, there will be significant impacts from continued depreciation in the value of sterling, cancelled investment, falling consumer confidence, rising costs and significant trade disruption. It states that the economy could still grow, but that growth could more than half. It has called for measures in October’s budget to include state supports for companies. “Every indicator of the Irish economy tells the same story. The economy is continuing to grow rapidly through a period of great uncertainty. This growth is also clearly benefitting households,” said Gerard Brady, chief economist with Ibec.
The economy is now close to full employment, with moderate inflation and the strongest increases in real living standards since the late 1990s. The seasonally adjusted unemployment rate for July 2019 was 4.6%, up from 4.5% in June 2019 and down from 5.8% in July 2018. The seasonally adjusted number of persons unemployed was 111,400 in July 2019, compared to 110,200 in June 2019. When compared to July 2018, there was an annual decrease of 25,900 in the seasonally adjusted number of persons unemployed.
Minister for Finance, Paschal Donohoe, says the Irish economy is ‘well-capable’ of withstanding a no-deal Brexit. He said that although the possibility of a no-deal Brexit was “clearly growing”, the Irish economy was prepared. “We have an economy well capable of responding to a no-deal Brexit, approaching the challenge with more people working in Ireland than ever before… This is a shock that we have the ability to respond back to, if we need to,” he told Newstalk’s Pat Kenny Show. It’s estimated that there would be 55,000 fewer jobs in Ireland if there’s a no-deal Brexit. Minister Donohoe said that if there is a no-deal, he would “kick off a whole chain of reactions” to combat the effects a no-deal Brexit would have but added that the Irish government would have to “reassess expectations”.
Sources: IBEC, journal.ie, CSO, Newstalk