Wednesday , March 22 2023

Ibec warns hard brexit could halve economic growth


Employers' group Ibec has warned economic growth.

The organization's predicts Gross Domestic Product growth this year will reach 4%, with households reaping the benefits of a high performance economy.

But it expects that 2.7% next year as the Irish and global economies reach the top of the current economic cycle and the slowdown starts.

However, the estimates contained in its latest Quarterly Economic Outlook are predicated on having a Brexit deal.

Ibec says that if there is a hard breach, it will be a waste of money.

In such an event, the economy will still grow, it anticipates, but that growth would be more than halved.

But it says it was not going to be a breach of a contract, but it would have to be lifted.

As a result, Ibec says the government should include extensive new state-sponsored aid to assist vulnerable companies in October's budget.

"2018 was the first year where the Irish indigenous exports fell since 2011," said Ibec Chief Economist Gerard Brady.

"This trend has been reversed in the early months of 2019, driven by increased productivity in both alcohol and dairy sectors.

"Both sectors will face challenges over the coming year due to US tariffs and Brexit, Ibec analysis has shown that Irish goods are the most exposed on EU goods.

"Irish exports worth € 818 million could be hit by new tariffs."

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The research also says that it is imperative that the face of any global slowdown, the government does not repeat the mistakes of the past by producing productive spending.

"The best way to prepare for the future is to get funding for Higher Education, "it states.

The analysis finds that while € 2bn a month is investing in the Irish economy, two times its pre-crisis peak, there's been some weakness in SME investment in recent months.

But it says this slowdown should be taken in context, however, with investment still close to record levels.

"Feedback from members suggests this slowdown is closely tied to Brexit's related uncertainty," says the report.

"In the event of a positive political breakthrough on Breckis, the economy could see a significant boost to investment in 2020."

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