Survey shows Brexit now greatest danger to Irish economy

Brexit has replaced fears of a global economic slowdown as the most significant danger to Irish economic growth, a market sentiment survey of Irish financial analysts has revealed.

The CFA Society Ireland survey revealed that 54% of respondents identified Brexit as the main danger to the Irish economy.

In addition, 31% identified that danger as being a global economic slowdown, while 15% said another Eurozone crisis.

This compares with the previous CFA market sentiment survey, where 57% said that a global economic slowdown was the biggest danger.

One in five of those in the CFA Ireland poll said that Brexit would have a “very severe” impact on Ireland while two-thirds said it would have a “moderately severe” impact.

“The results of our survey are quite stark and indicate clearly that a British withdrawal from the EU will have a very negative impact on Ireland,” CFA Society Ireland President Caitriona MacGuinness said.

There may be divided opinion on how severe that impact [will be], but it is a source of concern that more than 80% of those surveyed believe that there will be a moderate or severe impact.” .

The survey suggests there is sharply-divided opinion on what are the main dangers to global economic growth, with 39% suggesting a slowdown in developed markets as the main danger, 36% suggested a slowdown in emerging markets while 32% suggested the unwinding of Quantitative Easing and rising interest markets.

One quarter suggested Brexit and 10% another Eurozone crisis.

Sentiment towards the Irish stock market has become more negative in the past six months, the CFA Ireland survey reveals.

Six months ago, one in three said they expected the ISEQ Index (currently just below 6500) to close 2016 in a range between 7000 and 8000.

However, none of those surveyed believe the ISEQ will close above 7000, more than half believe it will end the year in a range between 6000 and 6500, while almost one-third believe the index will end the year below 6000.

On interest rates, some 58% expected the US Federal Reserve to raise interest rates before the end of the year while 53% believe it will be 2018 before we see a rate increase from the European Central Bank.