No-deal Brexit could help trigger further slowdown in global growth - IMF
THE devastating long-term economic impact of a ‘no deal' Brexit could cost Northern Ireland a staggering £5 billion by 2034, according to fresh analysis of government figures by the CBI.
The study reveals how Northern Ireland could be among the areas of the UK most exposed to the economic fallout from leaving the EU without a deal.
It claims that real GVA – the measure of value of goods and services produced in Northern Ireland - could be 9.1 per cent lower than under the UK's current arrangements with the EU according to government analysis.
And CBI calculates this could amount to an annual loss of output worth almost £5 billion in today's prices.
That is more than the annual public spending on hospitals, GP surgeries and other health services in Northern Ireland, and such a significant shortfall would hit people's jobs, livelihoods and living standards.
Manufacturing and the agri-food sectors would be most severely impacted as they are particularly exposed to the risk of higher tariffs and trade costs.
And with 57 per cent of Northern Irish goods exports going to the EU, any increased trade friction, added costs or delays would hit the region particularly hard.
CBI's region director Angela McGowan said: “Our members are clear: if the new approach to finding a Brexit deal continues to be a game of who blinks first, the Northern Irish economy will pay the price.
“The deadlock will only be broken by a genuine attempt by all MPs to find consensus and compromise, not stick to rusting red lines and political conditions. Like the rest of the UK, Northern Ireland is not – and cannot be – ready for no deal.
“The projected impact on our economy would be devastating and while business will do all it can to reduce some of the worst aspects, a no deal scenario is unmanageable.
“The message from the CBI to our politicians is clear – we must see compromise or the whole country faces the unforgivable prospect of a disorderly Brexit which will affect jobs and livelihoods in Northern Ireland for decades to come. It's time to put prosperity before party politics and dogma.”
Meanwhile a no-deal Brexit risks triggering a further slowdown in global growth as countries hunker down for a turbulent 2019 in the face of growing trade tensions, the IMF has warned.
In its latest World Economic Outlook, the organisation downgraded its global growth forecast for 2019 to 3.5 per cent and 3.6 per cent for 2020 - 0.2 per cent and 0.1 per cent respectively below its previous prediction.
The Washington DC-based fund maintained its 2018 estimate for global growth at 3.5 per cent, but warned that weakness seen in the second half of last year will carry over in the coming months.
The fund warned that Britain leaving the European Union without a deal and a greater than expected slowdown in China (its worst performance since 1990) could spark a further deterioration in sentiment and hit global growth, exasperating risks already posed by the deterioration in US-China relations.
"Risks to global growth tilt to the downside. An escalation of trade tensions beyond those already incorporated in the forecast remains a key source of risk to the outlook.
"A range of triggers beyond escalating trade tensions could spark a further deterioration in risk sentiment with adverse growth implications, especially given the high levels of public and private debt.
"These potential triggers include a 'no-deal' withdrawal of the United Kingdom from the European Union and a greater-than-envisaged slowdown in China," the IMF said.
Gita Gopinath, the IMF's new chief economist, claims Britain's GDP could take a hit of up to 8 per cent in the event of a no-deal Brexit and the country quitting on WTO terms.