Irish businesses have been managing Covid-19 restrictions, and due to Brexit could face extra checks and paperwork like any EU country trading with the UK. Despite this, Ireland was the only economy in the EU to grow in 2020.
According to official figures from the Central Statistics Office, Ireland's imports fell from just over €7.5 billion in December 2020 to €6.6 billion in January. Some of this is likely to be due to companies trying to get more goods across the border before Brexit rule changes came into force on January 1st, 2021.
Exports for January 2021 reduced by €1.7 billion compared with January 2020 for Ireland, although exports between December 2020 and January 2021 increased from €12.8 billion to €13 billion. This rise between December and January could be due to the increasing number of exporters who chose to bypass the UK land route to get to Europe in January, mainly using freight ferry routes direct to the EU instead, thus avoiding potential time extensive UK-EU border controls.
Staying on top of currency movements
The pound was strong against the euro in March due to the UK’s fast vaccine rollout. The EU’s vaccine issues have contributed to a weakening of the euro, meaning it is out of favour compared with other currencies, including the US dollar. EUR to GBP reached lows of 0.8505 on March 31st, 2021, last seen on February 28th, 2020 when it was at 0.8520. Among other factors, the pandemic and Brexit caused close to a 14 per cent swing for EUR to GBP between its highest and lowest point in 2020 – a big difference to a business paying a supplier overseas.
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© 2021 OFX Payments Ireland Limited. OFX Payments Ireland Limited trading as OFX is regulated by the Central Bank of Ireland (Company No. 642716). OFX does not provide financial advice and this information has been prepared without taking into account the investment objectives, financial situation and particular needs of any particular person.