In a recent BBC business article, the International Monetary Fund (IMF) has warned that a ”UK exit from the European Union (EU) could mean the UK misses out on up to 5.6% of GDP growth by 2019”
They (IMF) further state that a Brexit is the “largest near-term risk” to the UK economy, during the IMF’s annual UK economic outlook.
It added during the gathering that the “net economic effects would probably be ‘negative’ and ‘substantial.”
However, the Economists for the Brexit campaign state the “consensus that a UK exit would be bad for the economy was ‘based on flawed EU-centric models’.”
The IMF advisedly say that under its least adverse scenario for Brexit, by 2019 UK GDP would be 1.4% below what it would be should the UK vote to stay in the EU.
Its most adverse Brexit scenario predicts 2019 growth 5.6% below what it would otherwise have been, and also a drop in GDP in 2017 of 0.8%, which an IMF official described as a “recession”.
Under this scenario the UK would return to GDP growth of 2.9% in 2021. But the UK would have missed out on 4.5% of growth by then, according to the IMF.
‘Substantial Brexit costs’
Following a Brexit, the IMF finally said the UK would have to negotiate new trade terms with the EU if it wanted to stay in the single market.
If not, the UK could rely on World Trade Organisation rules, but this would ‘significantly raise trade barriers’, believe the IMF.
What do you make of the IMF brexit warning? Will the UK suffer economic consequences if it were to leave the EU? Will Brexit be able to negotiate trade deals quickly?
Comment below YOUR views of the IMF’s Brexit warning