Minister for Business, Enterprise and Innovation, Heather Humphreys today published a study commissioned by her Department, which examines the economic impact on Ireland of a potential EU-UK Free Trade Agreement.
The Political Declaration sets out the intent of both the EU and UK to negotiate a comprehensive Free Trade Agreement to replace the current economic relationship. At this point, the Government says it represents the best indication of what a future EU-UK FTA will look like.
Previous analysis published by the Department in 2018 found that the economic impact on Ireland of a worst-case Brexit scenario - trading with the UK based on World Trade Organisation (WTO) rules - would reduce Ireland’s projected annual growth rate and result in GDP being approximately 7% lower in 2030 (i.e. the economy would still grow albeit at a slower rate).
Taking the parameters of the revised Political Declaration, this study points to a reduction in GDP of between 3.2% and 3.9% in 2030. Effectively this reduces the level of harm on the Irish economy by half.
The Minister says businesses can choose from various supports including grants and mentoring programmes through the Local Enterprise Offices, Enterprise Ireland and InterTradeIreland, as well as the €300m Brexit Loan Scheme, the €300m Future Growth Loan Scheme, customs training initiatives, and the Rescue and Restructuring Scheme.
Launching the report, the Minister said, "We have always known that Brexit in any form will have a negative impact on Ireland. Nevertheless, it’s important to say that it will not cause a contraction in the economy. The economy will still grow but our estimates show that it will grow 3.2% - 3.9% less than it would have done if Brexit had not occurred."
She added, "It would be a mistake to underestimate how challenging that process will be, so I am strongly encouraging businesses to continue with their preparations in the coming period. There is nothing good in Brexit for Ireland so I would urge firms to take full advantage of Government supports."