In the short-run, the ongoing uncertainty over nature of the UK’s future relationship with the EU after the transition period could cause firms to delay investment spending. Heightened uncertainty could weigh on sentiment more generally, dampening spending by households. Exchange rates and financial markets could also be affected.
In the long-run, the UK’s departure is expected to have negative effects on the UK economy through lower productivity and weaker investment. Slower UK growth arising from these effects will reduce overall demand for Irish exports, although this could be mitigated by Irish exporters finding new markets or by an increase in foreign investment and inward migration.