EY cuts Irish growth forecasts and expects contraction in North from no-deal Brexit

EY sees Irish economic growth being slashed to 1.3% next year in the event of a no-deal Brexit, before rebounding to 2.1% in 2021

The Northern Ireland economy is projected to contract by 0.6%  next year under a no-deal scenario. Photograph: Getty Images

The Northern Ireland economy is projected to contract by 0.6% next year under a no-deal scenario. Photograph: Getty Images

 

EY sees Irish economic growth falling back to 3.7 per cent in 2019, and being slashed to 1.3 per cent next year in the event of a no-deal Brexit, before rebounding to 2.1 per cent in 2021.

In the event of the UK leaving the EU with a deal, EY expects growth of 3.7 per cent this year, compared to a 4.1 per cent projection made in June. In a new report on the economy here, EY has cut its 2020 growth forecast to 3 per cent from 3.3 per cent previously.

The Northern Ireland economy is projected to contract by 0.6 per cent next year under a no-deal scenario, according to the report.

EY also predicts that a no-deal would result in 60,300 fewer jobs across the island of Ireland by 2022, comprised of 41,500 fewer positions in the Republic and 18,800 in the North.

“The external economic climate is as challenging as it has been for a decade,” said Neil Gibson, chief economist for EY Ireland. “Despite strong domestic tailwinds, the dual threat of trade wars and Brexit have the potential to derail Ireland’s rapid growth.

“Estimates of a no-deal impact vary considerably, but they all suggest there will be a cost in the form of disruption across the island,” Mr Gibson said. “Regardless of the overall macro impact, the local and firm-specific effects could be devastating for some, with no-deal job losses likely to have a very particular sub-regional pattern.”