Brexit and EU crisis biggest threats to Irish economy

New survey says Government is failing to do enough to address potential fallout of Brexit

The City of London. The survey found 64%  believe Brexit poses a major danger to the Irish economy. Photograph: Simon Dawson/Bloomberg

The City of London. The survey found 64% believe Brexit poses a major danger to the Irish economy. Photograph: Simon Dawson/Bloomberg

 

The Government is not doing enough to address the potential fallout for Ireland from Brexit, a new survey has found.

That is the opinion of almost two-thirds of investment professionals, who said Brexit and a potential EU crisis were the biggest danger to the Irish economy, ahead of the incoming Trump administration in the US.

The CFA Society Ireland market sentiment survey found 64 per cent believed Brexit posed a major danger to the Irish economy, followed closely by an EU crisis at 61 per cent.

There is some pessimism that the withdrawal of the UK from the EU will result in a “hard” Brexit, with a third of respondents believing it would be the case.

Half expected a mixture of “hard” and “soft” Brexit, but only one in seven expect a “soft” exit from the union for our nearest neighbour.

Despite optimism from some quarters that Ireland could benefit from the situation, 60 per cent of investment professionals surveyed said Ireland was not in a good position to benefit from Brexit, with trade barriers, the fall in the value of sterling and possible lower UK corporation tax all major risks.

Almost 25 per cent also believed the loss of an ally would be to the detriment of Ireland.

Foreign direct investment

“Despite the election of Trump, investment analysts clearly believe that Brexit is still the major danger facing this country in the run-up to and following British withdrawal from the EU. And it is significant that almost a quarter of those we surveyed said the loss of a friendly ally is a major negative for Ireland post-Brexit,” said president of CFA Society Ireland Fran Carter.

“It’s also significant that a substantial majority of respondents said that the Government is not doing enough to minimise the risks arising from Brexit and Trump.”

Looking ahead to next year, half of respondents expect a slowdown in GDP growth, with a third anticipating a global slowdown.