Chief economist says GDP likely to dip by 3% after 10 years as negative effects hit home.
Our estimates suggest that after 10 years, GDP would be lower by 3 per cent,” said Gabriel Fagan. According to the bank, that estimate is in line with those of the Economic and Social Research Institute and the Department of Finance.
Speaking at the Seanad special select committee on the withdrawal of the United Kingdom from the EU, Mr Fagan said that the bank’s analysis is that the overall economic effects for Ireland in both the short term and longer term will be negative.
Free trade agreement
“The effects will be much worse if no free trade agreement can be reached. Some small to medium enterprises are likely to be among the hardest hit by Brexit,” Mr Fagan added.
The main concern from the bank is that the UK’s departure will be a hard Brexit, which “may require sudden regulatory and financial adjustments during a period of heightened uncertainty in the financial services sector”.
However, Mr Fagan noted that Brexit will present new opportunities for the Irish economy.
“Most notable in this regard are potentially stronger inward foreign direct investment as a result of both a relocation of existing UK-based FDI to Ireland and new FDI flows locating to Ireland instead of the UK.” [...]
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