EY cuts Irish growth forecasts and expects contraction in North from no-deal Brexit

EY sees Irish economic growth falling back to 3.7 per cent in 2019, and being slashed to 1.3 per cent next year in the event of a no-deal Brexit, before rebounding to 2.1 per cent in 2021.

In the event of the UK leaving the EU with a deal, EY expects growth of 3.7 per cent this year, compared to a 4.1 per cent projection made in June. In a new report on the economy here, EY has cut its 2020 growth forecast to 3 per cent from 3.3 per cent previously.

The Northern Ireland economy is projected to contract by 0.6 per cent next year under a no-deal scenario, according to the report.

EY also predicts that a no-deal would result in 60,300 fewer jobs across the island of Ireland by 2022, comprised of 41,500 fewer positions in the Republic and 18,800 in the North.

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"The external economic climate is as challenging as it has been for a decade," said Neil Gibson, chief economist for EY Ireland. "Despite strong domestic tailwinds, the dual threat of trade wars and Brexit have the potential to derail Ireland's rapid growth.

“Estimates of a no-deal impact vary considerably, but they all suggest there will be a cost in the form of disruption across the island,” Mr Gibson said. “Regardless of the overall macro impact, the local and firm-specific effects could be devastating for some, with no-deal job losses likely to have a very particular sub-regional pattern.”