Department of Finance Brexit Research
The paper examines the sectoral import exposures of the Irish economy and other EU Member States to the UK, building on a September 2017 Department of Finance research paper analysing export exposures. Together with previous studies, this report is a further contribution that will inform the whole of Government work on contingency planning. Link to press release here.
This paper examines how exposed traded sectors of the Irish economy and other European Union (EU) member states are to the United Kingdom in light of Brexit. The paper also compares Ireland’s revealed comparative advantage at the sectoral level, to show the most specialised sectors in Ireland relative to the rest of the world, and how Brexit may affect these.
This paper examines the trade exposures of sectors of the Irish economy to the UK in light of the United Kingdom’s decision to exit the European Union.
The research in this paper is motivated by a desire to better understand which sectors of Ireland’s economy are most exposed to the UK’s departure from the EU.
Note: This paper is an update of a previous version of the paper that was published with Budget 2017 on 11 October 2016. Following publication of the October 2016 version, the CSO released updated data which is now included in the revised paper.
This research was conducted under the joint Department of Finance and ESRI Research Programme on The Macroeconomy and Taxation, and examines the potential medium to long term implications of Brexit under a range of scenarios.
Looking at the effect ten years after a UK exit, a WTO scenario results in the level of GDP being 3.8 per cent below what it otherwise would have been in a no-Brexit scenario; the bulk of the impact occurs in the first five years. As a result, the level of employment is 2 per cent below what it would otherwise have been, with the unemployment rate nearly 2 percentage points higher. The most severe scenario indicates that the Irish economy will be more severely impacted than the UK economy.
In advance of the referendum under the joint Department of Finance/ ESRI research programme, an initial scoping study on the potential implications of Brexit was undertaken. The purpose of this study was to:
- Describe and quantify the key economic linkages which have developed over time between Ireland and the UK in the context of EU membership, and
- Make an initial assessment of the risks and opportunities to these economic linkages in the context of potential future developments at EU-level, in particular a UK exit from the EU.
The main findings of the paper relate to the implications Brexit may have for:
- Foreign Direct Investment
- Energy in Ireland, the UK and NI
- Migration across Ireland and the UK