Brexit 'will not cause a contraction in the economy'

Brexit 'will not cause a contraction in the economy'
Heather Humphreys

A reduction in the economic growth forecast due to Brexit has been halved just weeks ahead of Britain exiting the European Union.

The government published a new study which now predicts that, with a free trade agreement with Britain, GDP will be 3.2% to 3.9% lower in 2030 than it would have been without Brexit as opposed to the 7% originally predicted in a crash-out exit for Britain.

Business Minister Heather Humphreys published the report which found that an EU-UK free trade agreement would reduce the harm from Brexit by half.

“We have always known that Brexit in any form will have a negative impact on Ireland," the Minister said. "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.”

The Cabinet discussed the report in its last meeting before the general election was called. Taoiseach Leo Varadkar thanked ministers for their work and also explained why he was calling the election now.

However, Cabinet will still meet on January 29, just two days before Britain is scheduled to leave the European Union.

Ministers also agreed to draft legislation for new measures to clean up the electoral register.

Housing Minister Eoghan Murphy said that the Bill would allow local authorities to require a person to provide a PPSN, Eircode or date of birth in respect of their own registration details.

However, these new measures will not come into place for this election.

Elsewhere, Environment Minister Richard Bruton defied legal threats from oil giants to divert a two cent levy from fuels towards a climate action fund.

However, it was also agreed that the National Treasury Management Agency could provide funds to NORA as well as Irish Water.

The government agreed to establish the climate action fund on a statutory basis.

Future monies from a 2 cent levy placed on the sale of most oil products will now be transferred to the climate action fund. Oil groups had previously threatened legal action over moving the fund away from the National Oil Reserves Fund.

More on this topic

Sajid Javid issues post-Brexit warning to business leadersSajid Javid issues post-Brexit warning to business leaders

Countdown clock to be projected onto Number 10 to mark Brexit dayCountdown clock to be projected onto Number 10 to mark Brexit day

Farage accuses Government of being embarrassed by Brexit over Big Ben farceFarage accuses Government of being embarrassed by Brexit over Big Ben farce

Free trade agreement ‘very difficult if UK does not comply with EU standards’Free trade agreement ‘very difficult if UK does not comply with EU standards’