Share

SA to feel the blow in 'no-deal' Brexit, economist warns

North West University economist Raymond Parsons has warned that South Africa could be among the hardest hit by the UK’s path out of the European Union (EU).

Parsons is a referential economic commentator, having analysed and studied most of democratic South Africa’s economic trajectory. He authored books including The Mbeki Inheritance in 1999, and Zumanomics, published in 2013.

The UK is prominent in South Africa's trade prospects, as a trade partner to whom SA has exported more than R9bn worth of products.

UK Prime Minister Theresa May earlier this week deferred a vote that would have thrust the UK into the next phase of Brexit, with commentators speculating that this was an exercise in delaying the inevitable economic fallout. 

In a media release, Parsons said if the UK "crashed out" of the EU’s trade arrangements, Britain would immediately change from the trade rules of the EU to those of the World Trade Organisation, and become subject to the EU's common external tariff and customs requirements.

"The real danger now exists that the UK may well crash out of the EU without a withdrawal agreement and, if that occurs, it would have serious ripple effects through key parts of the international trading system and supply chains, including SA," said Parsons.

Parsons said institutions, including the UK Treasury and the Bank of England, have emphasised the heavy economic cost of a potential Brexit "no deal" for the UK.

"The International Monetary Fund estimates that, in the event of a 'no deal', the UK would lose about 5% of its GDP within a few years - the Dutch, Danes and Belgians would lose 1% or more as well. The Irish would probably lose about 5% of their GDP," Parsons said.

He added SA may need to "evolve contingency plans" to ensure that its economic interests in both the UK and the EU were protected and disruptions kept to a minimum.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.9%
Rand - Pound
24.10
-0.9%
Rand - Euro
20.59
-0.7%
Rand - Aus dollar
12.42
-0.9%
Rand - Yen
0.13
-0.8%
Platinum
915.75
-0.8%
Palladium
1,028.36
-3.5%
Gold
2,159.96
+0.2%
Silver
25.03
-0.6%
Brent Crude
85.34
-0.1%
Top 40
66,252
0.0%
All Share
72,431
0.0%
Resource 10
53,317
0.0%
Industrial 25
100,473
0.0%
Financial 15
16,622
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders