Report estimates no-deal exit for UK would see economy worse off by up to 7% of GDP by 2030

This article is more than 2 years old

This article is more than 2 years old

Britain’s departure from the EU will hit the economy in Ireland more than that of any other country in Europe, with a hard Brexit costing it about €18bn (£16bn), a study has found.



The minister for business, Heather Humphreys, said it was clear that Ireland would be the most “Brexit-impacted” country in the EU, but that the findings would help the state prepare policy adjustments to mitigate the exposure.



The study is the second major report commissioned by the Irish government on the potential effects of Brexit since 2015 and analysed 24 sectors of the economy.

It found that five sectors – agri-food, pharma, electrical machinery, wholesale and retail, and air transport – accounted for approximately 90% of the total economic impact.

“I think it is fair to say that the report from Copenhagen Economics makes for stark reading,” Humphreys said.

The report found that Brexit will hit the Irish economy no matter what type of deal is signed between London and Brussels.

Agriculture is one of the most exposed sectors, given the high level of food and drink exports, ranging from cheddar cheese, beef and mushrooms to Guinness and powdered milk.

The minister for agriculture, Michael Creed, said the sector was most acutely at risk because of its “significant reliance on UK market outlets”.

The report estimates that the UK’s departure from the EU will cause the value of output from key parts of the agri-food sector to decline by 10-20% by 2030.

The research compared four possible Brexit outcomes with the status quo of Britain remaining in the EU.

The worst-case scenario of a no-deal exit would result in Britain falling back on World Trade Organisation rules, making Ireland’s economy worse-off by up to 7% of GDP by 2030, the study found.

This would cost the country’s economy €18bn and cut annual growth from 2.2% to 1.7%.

The option of Britain joining the European Economic Area (EEA), often cited as the Norway model, would be the best scenario because duty-free trade would continue on most products, limiting the hit to GDP to 2.8%.



Humphreys said the study would be used to help “Brexit-proof” the economy, with some important steps having already been taken to cushion businesses, including the setting up of a €300m loan scheme for small businesses and a “Brexit response” fund for agriculture.