Niall Collins (Limerick County, Fianna Fail)
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81. To ask the Minister for Finance if information requested in correspondence (details supplied) will be provided; and if he will make a statement on the matter. [7379/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Government has always been clear that Brexit, in whatever form it takes, will have a negative economic impact on Ireland. Indeed, the Department of Finance has been to the forefront in assessing the impact of Brexit on our economy- commissioning joint research with the ESRI on the issue, including before the actual referendum. What is clear from this research and other studies is that the harder the Brexit the more negative the impact on Ireland. This analysis has focused on assessing the impact on the overall economy along with and identifying the sectors which are most exposed. These studies do not provide a detailed analysis by region. However, they do show that the most negative effects are likely to be felt in the agri-food and indigenous manufacturing sectors.

While my Department’s central economic and fiscal planning scenario remains an orderly exit involving the UK leaving with a transition arrangement in place, the risk of a disorderly exit has increased in recent weeks. As part of the Government’s ongoing contingency planning for a no deal Brexit, the Department of Finance’s initial assessment of the economic and fiscal impact of ‘no deal’ Brexit was released on the 29th January 2019. In a disorderly exit, while in aggregate terms, the economy is likely to continue expanding, the pace of growth would be lower than is currently expected.

The initial assessment by my Department suggests that the level of economic activity will be around 4¼ percentage points lower than our existing trajectory over the medium-term and will be around 6 percentage points lower compared to a ‘no Brexit’ scenario. This aggregate assessment incorporates an even larger impact on economic activity in labour-intensive sectors such as agri-food and indigenous small and medium-sized enterprises.

This assessment is based an initial application of the latest UK estimates from the National Institute of Economic and Social Research, the UK equivalent of our ESRI. The Department and ESRI are preparing a more comprehensive update of their original work and the results will be published later this quarter. This output will be incorporated in the Stability Programme Update due to be published in April.

It is important to recognise that such estimates may not capture the full impact, and the figures may be conservative. Indeed, the impact in certain exposed sectors and regions will be worse than the average.

Of course, it is important to point out that Ireland is facing the challenge of Brexit in a robust economic position, with the highest GDP growth in Europe and record employment levels. In addition, exports, job creation, inflation and public debt indicators are all strong. This will provide a stable platform for the external challenges that lie ahead.

Since the referendum result in 2016, we have been taking steps to build up the resilience of the economy so that we have the capacity to deal with adverse economic shocks. This includes building up our Fiscal Buffers – by balancing our books and reducing our debt burden - and establishing the Rainy Day Fund. The Government will continue to work to strengthen the resilience of the economy, to maximise opportunities and to prepare our economy for the challenges of Brexit, including through the Ireland Connected Trade and Investment Strategy and the 10-year National Development Plan.

In addition, recent budgets have introduced specific initiatives, such as loan supports for agri-businesses and SMEs, aimed at supporting those businesses most affected by Brexit. The Government will continue to work to improve the business environment – to make it more competitive, to assist exporters to diversify markets, and to provide better infrastructure. That is the key to addressing the type of economic uncertainties which arise from Brexit. Longer-term, we need to mitigate against the potential of regulatory divergence between the UK and EU standards given its potential impact on trade and investment and the competitiveness of our businesses. We will therefore be working to minimise this impact and to ensure a level playing field.