WITH JUST under three weeks to go before the UK leaves the European Union and still no deal on the table, tensions surrounding the impact that a No-Deal Brexit will have on Ireland are high.
All this week leaders of different countries have vocalised their concerns that a deal may not be possible-- and despite Leo Varadkar and Boris Johnson saying that there is 'a pathway to a possible deal' after discussions yesterday, there is no solid evidence of what this could entail.
Now the Central Bank of Ireland has warned that a No-Deal Brexit could cause a recession and job losses in Ireland, according to data published in their newest Quarterly Bulletin.
The Bulletin contains statistics of what the Bank expects to happen in the event of No-Deal, and to put it mildly, it looks bleak-- with the journal citing "significant domestic and external risks and uncertainties", mainly stemming from Brexit.
It estimates that Ireland will begin to feel the "negative shock" from a No-Deal result at the beginning of 2020: disruptions at trade ports, unstable exchange rates, new tarrifs and higher prices for all food imported from the UK will be the most obvious and immediate consequences.
With GDP growth expected to slow to 0.8 per cent in 2020, the country would slip into a recession, and both businesses and individuals would cut spending-- damaging the economy even further.
Even more worrying is their prediction of 73,000 job losses in the event of No-Deal, with unemployment levels rising to 5.8 per cent.
The Bank does expect things to stabilise in 2021, but warn that the impacts of a disorderly No-Deal would be felt in Ireland for a long time to come.
In the event of a deal however, the Central Bank estimate that the economy will grow while unemployment levels fall to an estimated 4.8 per cent by 2021.
The Central Bank are the second economic research group to predict that a No-Deal Brexit would push Ireland into a recession: In September, the Economic and Social Research Institute (ESRI) of Ireland published their own Quarterly Economic Commentary in which they said:
"If a No-Deal Brexit were to materialise in late 2019, output growth could disipate entirely next year.
It is not inconceivable that the Irish economy could contract in 2020 under such a scenario,"
The Irish government has announced that they have €800 million set aside in the case of No-Deal, with an additional €100 million to be used to combat the cost of extra unemployment benefits.