A hard Brexit would permanently damage Ireland, reducing the size of the economy by almost 4% and cause a rise of almost 2% in unemployment, according to a study by the Department of Finance and the Economic and Social Research Institute.
The research examined the impact of different Brexit scenarios. It found that all of them were negative for Ireland.
In the event of a hard Brexit, with tariffs imposed on goods and services going in and out of the UK, Ireland’s economy would shrink by 3.8%, unemployment would rise by 1.9% and average wages would fall by 3.6%.
In a soft Brexit scenario, where Britain remains part of the European Economic Area as Norway is now, the economy would contract by 2.3% and unemployment would rise by 1.2%.
The study examined the impact on the Irish economy ten years after the UK leaves the EU.
The projections are on the basis of the Government not taking any action to counteract Brexit and not changing any policies.
The paper said there was almost “complete consensus” that Brexit will have a negative effect on the UK economy.
It added: “The UK is one of Ireland’s closest economic partners, as such, Ireland will be very exposed to the effects of the UK leaving the EU.”
In a statement the Department of Finance said: “The Government is confident that our economy is resilient and that appropriate fiscal policies are now in place.
“This will help us to adjust to the economic effects of the UK’s negotiated withdrawal from the EU. In Budget 2017, the Minister for Finance introduced a number of measures to help get Ireland Brexit ready.”
