Brexit uncertainty holds back investment in Northern Ireland

Brexit and Uncertainty in Northern Ireland

Boris Johnson launches a final effort to get the Brexit deal done as Brexit uncertainty impacts economic growth.

The Brexit deal suggested has critical implications on the economy of Northern Ireland.

Both the UK and the EU hopes to avoid a hard border between Northern Ireland and the Republic of Ireland.

However, the alternative proposed by Prime Minister Johnson risks economic recession in Northern Ireland.

Consequently, Brexit uncertainty holds back investment in Northern Ireland.


Increasing uncertainty in Northern Ireland worries investors. Prime Minister Boris Johnson’s Brexit deal proposes extra regulations for businesses.

Businesses in Northern Ireland ordering goods from the rest of the UK will need to go through a screening process.

Businesses in Northern Ireland will request to order goods from the rest of the UK.

Furthermore, customs officers will examine whether ordered goods are at risk of entering the Republic of Ireland.

Businesses in Northern Ireland will need to pay an export tax for goods that are at risk of entering the Republic of Ireland.

When businesses prove that goods they ordered from the rest of the UK stayed in Northern Ireland, they will get a tax refund.

Moreover, businesses in Northern Ireland will declare goods exiting Northern Ireland to enter the Republic of Ireland.

If businesses export goods they ordered from the rest of the UK, they will not get a tax refund.

The export tax creates a sunk cost for businesses who send goods to the Republic of Ireland.

Who will be affected?

The initial cost of the suggested export tax will affect small businesses that cannot afford the cost.

The deal increases the opportunity cost incurred by businesses in Northern Ireland.

As a consequence, small businesses who depend on goods coming from the rest of the UK will struggle to survive after Brexit.

As a result, Danske Bank predicts a rise in unemployment rate in Northern Ireland.

Northern Ireland predicts a 0.5% growth next year compared to 1.3% this year.

If the government does not introduce a way to help small businesses, employees in small businesses risk losing jobs.


Northern Ireland expects strong growth in various sectors such as information and communication.

Further regulations after Brexit might disappoint expectations of growth in these sectors due to a weaker external environment in Northern Ireland.

Danske Bank economist Conor Lambe stated they have revised their economic growth forecast in Northern Ireland downwards for 2020.

The change in forecast for economic growth reflects increasing Brexit uncertainty.

The UK is also feeling in impact of Brexit uncertainty as business in the manufacturing sector slow the flow of investment.


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