The Irish Central Bank’s chief economist has warned that a hard Brexit could cost the county as many as 40,000 jobs.
Gabriel Fagan told the Seanad Brexit Committee that out of the remaining 27 EU nations Ireland is likely to be hardest hit by Brexit.
He said: “The effects will be much worse if no free trade agreement can be reached. Some small to medium enterprises are likely to be among the hardest hit by Brexit.”
“Under this scenario, our estimates suggest that after 10 years, GDP would be lower by 3 percent and the number of people employed would be 40,000 fewer, compared to a benchmark no-Brexit scenario.”
Fagan told the committee that the bank expects the the overall effect of Brexit on Ireland to be negative in both the short and long term.
The bank’s biggest worry is a hard Brexit which “may require sudden regulatory and financial adjustments during a period of heightened uncertainty in the financial services sector”.
However, Fagan said Brexit could present new opportunities for Ireland if the UK becomes economically isolated.
He said: “Most notable in this regard are potentially stronger inward foreign direct investment as a result of both a relocation of existing UK-based FDI to Ireland and new FDI flows locating to Ireland instead of the UK.”