Brexit has cost Britain nearly 2.5% of GDP: Goldman Sachs
A study by the global investment banking, securities and investment management firm, Goldman Sachs has stated that Brexit has cost Britain nearly 2.5% of GDP.
Findings of the Study
- Britain’s economy has lost nearly 2.5 per cent of GDP relative to its growth path prior to the mid-2016 referendum on exiting the European Union (EU) and has lagged other advanced economies as uncertainty dents investment.
- Policy makers in the UK are still struggling to chalk out the Brexit modalities. The resulting uncertainty over the future political and economic relations with the EU has resulted in real costs for the UK economy and has a spillover effect on other economies.
- Brexit uncertainty has been a major driver of economic output losses as they are concentrated in investment.
- Goldman Sachs predicts that the Brexit cost stood at around 600 million pounds ($785 million) per week since the referendum.
- Further, in a no-deal Brexit scenario it predicts a 15 per cent chance of, Britain witnessing output losses with a ”substantial” global confidence shock marked by sharp sterling depreciation.
The study notes that the Brexit will have spillover effects and European countries would be most exposed to this scenario and estimates an output loss of around 1 per cent of real GDP.