Think-Tank: Direct Impact of No-Deal Brexit on Slovenia Would be Small

By , 25 Mar 2019, 10:20 AM Business
Think-Tank: Direct Impact of No-Deal Brexit on Slovenia Would be Small Montage: JL Flanner

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STA, 22 March 2019 - The government macroeconomic think-thank has estimated that the direct impact of a no-deal Brexit on Slovenia would be small, while the indirect impact through the countries with which Slovenia does most of its trade would be greater but also harder to measure.

The Institute of Macroeconomic Analysis and Development (IMAD – Urad RS za makroekonomske analize in razvoj) has found based on various studies that the long-term effect of a no-deal Brexit on Slovenia would be between -0.2% and 1% of gross domestic product (GDP).

Meanwhile, the impact of an orderly exit of the UK from the EU would be smaller, estimated at between -0.1% and -0.25% of the country's GDP.

This would hold true in the case of the confirmation of the current Brexit agreement, which envisages the UK remaining part of the customs union, IMAD said in its latest publication on macroeconomic trends.

"Introduction of customs duties would decrease the volume of bilateral trade between Slovenia and the United Kingdom, with the electrical, automotive, pharmaceutical and metal industries suffering the largest negative effect."

According to the think-tank, also to be somewhat affected would be exports of services, in particular tourism and transport.

Since the direct connection of the Slovenian and British economies is relatively small (Slovenia generates 1.9% of its exports in the UK), the direct negative effect on exports and GDP would be small.

An indirect effect would be somewhat bigger due to Slovenia's trade connections with Germany and France, which are major trade partners of the UK.

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