Uncertainty is the overwhelming feeling that Brexit has brought onto the entirety of the EU. Here in Ireland, we are no exception. The fear of a large economic downturn is looming, and it seems everyone is fixated on what will happen when October 31st comes around.
The Irish economy as a whole was predicted to grow 4.1% in 2019 and forecasted an increase in the GDP of 3.7% in 2020 according to the European Commission. This however was predicted without considering the effect of a hard exit by the UK. A hard exit could bring an economic fall out consisting of lowered income levels, and higher unemployment rates. Experts from the Economic and Social Research Institute suggest that these conditions can lower the intense growth of property prices since the low in 2013. The Central Statistics Office says this growth has been just over 86% within those 6 years. Housing demand is likely to lower, affecting mortgage companies, brokers, and families trying to sell or relocate.
However, the housing industry will likely not be the hardest hit industry from the results of Brexit. This burden will likely fall upon the agri-food sector. Ireland relies heavily on exporting food products to the UK. The Department of Agriculture, Food and Marine states that roughly 50% of Irish beef exports go to the UK, followed by 22% of dairy products, 99% of mushroom sales, and 71% of forestry foods. The majority of Ireland’s agri-food exports will go to the UK every year.
With a no deal Brexit, a hard border will be placed between the Republic and Northern Ireland. This will cause many challenges to arise including a tariff on transporting goods across the border. In some cases there will be upwards of 18% charged, with a possible additional charge dependent on weight. Most meat being traded across the boarder will see a roughly 12% tariff, and anywhere from €100-€300 per 100 kg.
With the increased cost of trading with the UK Ireland will need to look for more profitable EU markets. This poses its own difficulties that won’t be solved overnight. The initial issue is finding the right markets. It’ll take time to find what works for Irish farms, and that’s money lost. On top of that, a lot of the products such as cheddar cheese are orientated for the UK market and won’t sell as well in other markets. A study done by Central Bank estimates that around one third of all Irish farms will fail due to a hard exit from the UK and everything that comes along with it.
It’s no question there will be fallout post Brexit, especially if no deal is made. Although income levels are predicted to drop and unemployment will likely rise, Irish farmers face one of the biggest uphill battles trying to cope with the new rules that could be put in place. Still however, the world lies in wait as the deadline quickly approaches. Some preparing for the worst, while others are counting down the minutes. It seems clear however that everyone will feel the affects one way or the other.
