IMF Says British Exit From EU Could Wreak Severe Damage in U.K. and Beyond
13 April 2016, Nirapad News: The UK’s exit from the European Union could cause ‘severe regional and global
damage’, the International Monetary Fund has warned in its latest outlook.
A so-called ‘Brexit’ would disrupt established trading relationships and cause ‘major challenges’ for both the
UK and the rest of Europe, it said, reports the BBC.
The IMF said the referendum had already created uncertainty for investors and a vote to exit would only
Vote Leave said the IMF had been ‘consistently wrong’ in past forecasts.
The IMF also cut its UK growth forecast. It now expects 1.9% growth in the UK this year, compared with its
January estimate of 2.2%. For next year, it expects 2.2% growth, unchanged from its earlier forecast.
If the referendum were to decide in favor of leaving the EU the IMF would expect negotiations on post-exit
arrangements to be protracted, which it warned ‘could weigh heavily on confidence and investment, all the while
increasing financial market volatility’.
It also believes a UK exit from the EU would ‘disrupt and reduce mutual trade and financial flows’ and restrict
benefits from economic co-operation and integration, such as those resulting from economies of scale.
However, the Fund said that domestic demand, boosted by lower energy prices and a buoyant property market,
would help to offset the impact on UK growth ahead of the EU referendum.
Chancellor George Osborne said the IMF’s comments reinforced the case for staying. ‘The IMF has given us the
clearest independent warning of the taste of bad things to come if we leave the EU,’ he said.
Meanwhile, Prime Minister David Cameron tweeted, ‘The IMF is right – leaving the EU would pose major risks for
the UK economy. We are stronger, safer and better off in the European Union’.