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Brexit fears send Irish business confidence to lowest level since 2012

Edmund Heaphy
Finance and news reporter
Photo: Reuters

Business sentiment in Ireland hit its lowest level since 2012 in the third quarter, with more than two thirds of businesses citing Brexit as the biggest risk to the Irish economy.

The survey, conducted by KBC Bank and Chartered Accountants Ireland, found that companies have started to consider the possibility of a no-deal Brexit, rather than a “Brexit bump.”

“Brexit is overwhelmingly seen as an unclear and present danger to Irish economic prospects, with 67% of companies citing it as the major risk to the economy in the coming year,” said Austin Hughes, chief economist at KBC Bank Ireland.

While the report considers the findings consistent with a “healthy economy,” the results indicate that Irish companies had turned their focus from recovery to potential risks.

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Sentiment dropped to a reading of 99.4, below the level seen in the immediate aftermath of the Brexit referendum, 99.9.

After Brexit, the next most-cited concern was the potential for the Irish economy to overheat. Though Ireland is predicted to have the highest economic growth in the European Union this year, most forecast models for 2019—which also predict continued growth—are contingent on the UK striking a deal before it withdraws from the bloc.

In July, the International Monetary Fund predicted that a no-deal Brexit could reduce Irish economic output by nearly 4% and cost nearly 50,000 jobs, and said that the loss in Irish economic output could be as much as for UK itself.

As such, around half of the companies surveyed predicted a slowdown in Irish economic growth in 2019, with less than a third expecting stronger growth.

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