Insider Economy Brexit extension set to boost Irish economy, says finance minister

Brexit extension set to boost Irish economy, says finance minister

The extension of Britain’s scheduled departure from the European Union means there is likely to be some upside to neighbouring Ireland’s economic growth forecasts, the Irish finance minister said on Tuesday.

Ireland presented its budget for 2020 last month assuming Britain would leave the EU without a deal on Oct. 31, a shock forecast to push the state’s finances into deficit and cut gross domestic product (GDP) growth from 5.5% this year to just 0.7%.

Britain agreed a divorce deal with the EU 10 days after the Irish budget, which Prime Minister Boris Johnson hopes to win parliamentary approval for if he retains power after a snap election on Dec. 12 that necessitated an extension of Brexit to Jan. 31.

“The risk of the UK departing the EU without a deal has been averted for now. However, the ultimate outcome is still uncertain and a disorderly Brexit is still possible,” Minister Paschal Donohoe told a parliamentary committee.

“The extension of the Article 50 exit means that there is likely to be some upside to my Department’s forecasts. Indeed, if the withdrawal agreement is ratified, Ireland’s position will, inter alia, improve with increased revenues and lower expenditure than forecast in Budget 2020.”

Donohoe said Irish GDP could grow by around 3.1% next year and he could deliver a budget surplus of 0.5% in such a scenario.

That would still represent a slightly weaker outcome than the 3.3% GDP growth for 2020 his department was forecasting in April before it based its figures on a no-deal Brexit. It had pencilled in a 0.4% budget surplus for 2020 at that point.

Donohoe also flagged that it was conceivable Ireland’s fiscal position for 2019 could be better than the 0.2% budget surplus forecast a month ago due to the “distinct possibility” of stronger than expected corporation tax receipts.

Those receipts, mainly boosted by Ireland’s large cluster of multinational firms, were running 10.6% ahead of government target at the end of October before the largest collection month of the year in November.

Donohoe said he expected corporate tax receipts to increase again next year before plateauing and likely declining at some point as new rules currently under discussion for how big multinationals are taxed around the globe are introduced. (Reuters)

Top Stories


It is one of the most innovative sushi restaurants on the island, since you can place your order through your interactive table that works...

Tucano Coffee

What does a person need in life? The Tucano Coffee comes to give you the answer: Love.Peace.Coffee. The things are simple. A coffee chain...


A simple, elegant place that honours tradition but turns its back on folklore. Enjoy your excellent quality and tasteful Lebanese meze, without the tambourines...

US: International military education and training for Republic of Cyprus

  The United States is to provide international military education and training (IMET) to the Republic of Cyprus, the embassy in Nicosia has announced. "We plan...

Indiktos Cafe

You have tests or research or articles or presentation, something that needs a lot of study. And when you are home you do not...


How to make triandafillo ice cream, by UK Cypriot chef Loulla Astin

  Just in time for the scorching heat, UK Cypriot chef Loulla Astin has shared her recipe for refreshing triantafillo ice cream -- or as...

Cyprus sprouts with cream and prosciutto

In a big, deep frying pan, fry the prosciutto in the olive oil, on medium heat for 2 minutes. Add the onion and garlic...

Pork burger with sundried tomatoes, mozzarella and anchovies

Mix all the ingredients together with the mince in a bowl, and combine well. Divide into 4 balls and form the burgers. Warm a griddle/pan...


Wash the lamb cauls with plenty of cold water and let them settle in water and vinegar for a little while. Soak the bread crumbs...