The chief economist for the largest business lobby group in the country, IBEC, has warned that the Government should be planning for a no-deal Brexit by putting legislation and funding in place “no matter what the outcome.”
Gerard Brady warned that enterprise stabilisation funds need to be in place even if there is still hope for a deal to be agreed.
A no-deal scenario will mean a downturn with cuts to investment he told RTÉ radio’s Morning Ireland.
The Government will need to ensure the national investment plan is maintained because it will “prop up” the regional economy.
Companies that import from the UK will also be “badly impacted” as well as those who export, added Mr Brady.
Uncertainty about a no-deal Brexit will mean that businesses will cut investment which will stall growth.
But it will not just be businesses that will be impacted by a no-deal Brexit, he said. There will be a significant impact on householders.
There are also further threats in the global economy that will have an impact such as trade wars and the €800m in business that will be exposed to tariffs threatened by US President Donald Trump, especially in the dairy and whiskey sectors.
“This is a very difficult and new situation that we’ve never been through before. For the indigenous sector this is new ground and it will be very bad. SMEs will also be affected by the uncertainty of new trading relationships.”
There will be pressure on cash flow for companies, and many will go out of business, said Mr Brady.