Will UK economy shrink on Brexit?

The 'Remain' and 'Leave' campaigners both need to ponder over the statistics made public by the IMF.

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Published: Sun 19 Jun 2016, 12:00 AM

Last updated: Sun 19 Jun 2016, 8:38 AM

With just days to go before the Brits decide on their future relationship with the continent of Europe, the International Monetary Fund has come up with a firm word of caution for London. It says an exit from the 28-member European Union would be damaging for its economic credentials. The international donor believes that the United Kingdom will miss out on its growth targets, and might slide into isolation. In simple terminology, the IMF has said that Brexit is the 'largest near-term risk' and its after-affects would be negative and substantial. It says that until 2021, the British economy would be in the woods if the 'Leave' campaigners triumphed. The IMF has also projected a recessionary trend, as the country is likely to miss out on its GDP growth. In 2017, the GDP drop could be 0.8 per cent, leading to severe macroeconomic contraction for an economy that is enterprising, free and adaptive.
The 'Remain' and 'Leave' campaigners both need to ponder over the statistics made public by the IMF. It will help them bring home a more researched response before the vote is cast. Though the In/Out vote is purely political in essence, as Britain for long had nursed grievances with the centralised decision-making in Brussels, London cannot brush aside the geo-economic ramification of choosing to step out of the union. Few of the problems that Britain will face in case of an exit vote is to negotiate new trade terms with the EU, if it wanted to stay in the single market. It goes without saying that about half of UK trade is with the EU sates. Britain is primarily a major importer of goods from the EU countries. Which in other words means evolving its international trade parameters anew, risking market volatility and flight of capital. Brexit or not, the vote has kick-started a debate which will go a long way in reorienting the economy more on indigenous lines and sooner than later coming up with a protectionism of its own.

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