The answer in economic terms is that it would affect a broad range of countries, but the direct impact would not be economically significant.
- Due to its close trade linkages, Ireland is likely to see the largest negative impact from a Brexit;
- Several non-EU countries are also likely to feel pain, with China, Saudi Arabia and Egypt all expected to see a similar level of impact to Germany in 2017. This is also due to trade linkages.
Although the negative impact will be broad-based but not substantial in any one particular country, it is also clear that it would not benefit any other country. In 2017, none of the 57 countries in our macro model will see an uptick in growth in a Brexit scenario.
Difference from our Baseline Forecasts in a Brexit Scenario: 2016-2020
Source: Euromonitor International Macro Model
EU will be damaged
However the uncertainty which would follow a “leave” vote would also flow-on to the EU itself. The UK plays a significant role in the EU, both economically and demographically. In 2015:
- The UK was the EU’s 2nd largest economy – behind Germany. It is also out-performing the other large EU economies, contributing 35% of the EU’s economic growth between 2010 and 2015.
- The UK was the EU’s largest consumer market, and was responsible for 1-in-5 $ spent in the EU; again it is fast-growing, responsible for 56% of growth in consumer expenditure since 2010.
- The UK was the EU’s 5th largest exporter and also the destination for 7.4% of EU exports. Germany is the bloc’s chief exporter to the UK.
- It was also home to 12.8% of the bloc’s population and was the destination for 11.5% of all EU migrants in 2013.
There are clearly wider political and economic affects which should also be considered, with the very future of the organisation itself under pressure.
