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Doherty ‘deeply concerned’ as Fiscal Council suggest impact of Brexit may be underestimated significantly

21 June, 2017 - by Pearse Doherty TD

Sinn Féin Finance spokesperson Pearse Doherty TD has said he is deeply concerned following comments by the Fiscal Council’s Chief Economist at the Budget Oversight Committee that the Department of Finance’s projections may underestimate the impact of Brexit significantly.

Deputy Doherty said:

“I am deeply concerned that the Fiscal Council told me yesterday that the COSMO model used by the Department of Finance may seriously underestimate the negative impact of Brexit on the Irish economy. When we consider that the Department is predicting 40,000 less people at work and an extra public debt of €20bn as a result of a Hard Brexit then these comments from the Fiscal Council are deeply concerning.

“The Council’s Chief Economist explained how they were worried that the Department of Finance’s figures were too optimistic on three grounds. Firstly, the model used does not take into account the fact that exports to Britain are more labour intensive than other export markets. Secondly, the COSMO model could underestimate the shock impact of Brexit and finally the model does not take into account the exchange rate changes that as we have seen already  have been a feature of the Brexit process to date.

“When I pushed the Council as to the possible implications, they confirmed the effect could be significant. Additionally, the Council indicated that the ESRI shares these concerns.

“The concerns of the Fiscal Council and ESRI echo my concerns that the government does not fully grasp the scale of the challenge of Brexit.  These concerns emphasise why we need to argue for Special Status for the North and for government action to secure State Aid flexibility and exemptions under the State Aid rule argued for by Sinn Féin.” 

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