ESRI: North impact worst affected by Brexit

Northern Ireland would be the worst hit of all economies by a Brexit, a leading thinktank has warned.

ESRI: North impact worst affected by Brexit

The Economic and Social Research Institute (ESRI) has predicted farming and food producers would be among those paying the biggest price in the event of the UK leaving the EU. The industries are key to Northern Ireland’s economy.

In its latest quarterly economic report, the State-funded thinktank also suggests any barriers to cross-border trade could heavily impact prosperity in the region.

Kieran McQuinn, research professor at the ESRI and report author, said Ireland will also be impacted, though less so, by a knock-on effect.

“Of all the economies in this part of the world we think the Northern Ireland economy will be the worst hit by Brexit, because it is very heavily reliant on agriculture and food processing generally,” he said.

“It is also very integrated with the Republic’s overall economy. Therefore any types of barriers or impediments to trade between it and the Republic, I think will hit it quite heavily.”

Mr McQuinn said the ability of Northern Ireland to withstand a fallout from a Brexit would come down to subsequent trade talks, which could see traders and businesses being shouldered with new costs.

“Northern Ireland agricultural producers could find themselves facing a significant tariff for example,” he said.

The ESRI has predicted Ireland’s economy — based on the value of all goods and services in the country or gross domestic product — will increase 4.6% this year and 4.2% next.

That is more than twice the growth rate of most European economies.

However, the forecast growth is slightly less than previously expected because of a downturn in global trade and the uncertainty caused by the imminent EU referendum.

Mr McQuinn said the short-term impact of Brexit uncertainty may have been played out already in the Irish economy. However, if the UK votes to leave the EU there could be further issues ahead.

“Markets tend to figure into their expectations all the adverse outcomes,” he said. “So Thursday could come along with the Brexit result and there could possibly be no further escalation or deterioration of exchange rate and the like. But on the medium term it could affect Ireland on the trade side. What exactly will be the trade situation, what kind of border will we have?”

Meanwhile, a group of influential British thinktanks said a Leave vote could cut the UK’s GDP by as much as 8% — the equivalent of £5,760 (€7,500) for every household in Britain.

In a joint statement, the Institute for Fiscal Studies, National Institute of Economic and Social Research, and Centre for Economic Performance said “almost all those who have looked seriously” at the consequences of Brexit agreed it would be highly likely to harm the living standards of UK households.

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