Dáil Éireann Debate, Thursday - 26 January 2017
70. Deputy Michael McGrath asked the Minister for Finance if he will be fully publishing his Department's current assessment of the economic impacts on the Irish economy of a hard Brexit (details supplied); and if he will make a statement on the matter. [3739/17]
Amharc ar fhreagraMy Department has been to the fore in producing and funding a number of economic assessments on Brexit, both before and after the referendum. Outputs include:
- A scoping study in November 2015 under the Department of Finance-ESRI joint research programme,
- Initial short-term estimates published in the Summer Economic Statement 2016,
- An in-depth analysis of the possible sectoral and regional impacts of Brexit arising from Ireland's trade relationship with the UK, published with Budget 2017; and,
- A joint research paper with the ESRI that modelled the medium to long term macroeconomic impact of Brexit under a number of scenarios, including a hard Brexit.
All of these outputs have been made public.
In particular, the medium to long term economic impacts of a "hard Brexit" are set out in the November 2016 joint paper with the ESRI - this was the analysis which my officials were referring to.
The paper, which used the new ESRI COSMO macroeconomic model, highlights that the impact on the Irish economy will be significant. Looking at the effect ten years after a UK exit, a hard Brexit scenario results in the level of GDP being almost 4 per cent below what it otherwise would have been in a no-Brexit scenario; with most of the impact coming in the first five years. The level of employment is expected to be 2 per cent below what it would otherwise have been; in other words, employment growth will be slower than would otherwise be the case. On the public finances side, the deficit and debt ratios would be 1 and 10 percentage points higher.
The Deputy will also be aware that the impacts of a hard Brexit were also considered by the ESRI in a separate analysis in November 2016 that looked at the impact of WTO trade tariffs. The findings in that paper, in broad orders of magnitude, are consistent with those in the joint research my Department published with the ESRI that same month.
I would stress that all of these results are based on a no policy change assumption. To this extent, the measures that I announced in Budget 2017 are a first step in what will be an ongoing process of getting Ireland Brexit ready.
