BREAKING: The International Monetary Fund says that the Brexit vote could result in a massive disruption to the global economy, and it’s all the more reason for the United Kingdom to stay in the EU.
The IMF’s World Economic Outlook said the UK would lose an average of 8.5% of its GDP in 2020 as a result of leaving the bloc.
That’s a big number considering the country only lost around 1% of GDP in 2016.
But the IMF says the economic fallout from a Breviary breakup would be much greater.
It says the impact on UK exports and investment would be “unprecedented,” and that it would lead to a “significant and rapid drop in the value of sterling and a severe drop in investment.”
The IMF says that would lead Britain to lose a whopping 2% of the world’s gross domestic product in 2020.
But it’s also going to have a big impact on global growth, as the IMF said in its report that it could cause a “severe and potentially irreversible slowdown in global economic growth.”
That slowdown is likely to come at a very bad time for the UK, which is currently suffering through a massive drop in confidence and unemployment as a direct result of Brexit.
“The UK’s decision to leave the European Union is not a question of whether it should remain in the European Economic Area (EEA), but whether it can find a way to maintain its own membership,” IMF Managing Director Christine Lagarde said.
“Brexit will cause a significant and rapid reduction in the trade and investment relationship with the EU, which would have significant negative consequences for the wider economy, including for the U.K.’s gross domestic products and employment.”
That’s because the EU’s biggest economies are all dependent on the UK for nearly all of their goods and services, and the UK is one of the biggest exports of the EU to the rest of the bloc as well.
That means the EU will have to import almost everything from the U-K, including its goods, to make up for the lost trade.
So that could have a huge impact on U.S. exports, which depend on the U, as well as on EU imports.
The U.k. will also lose billions of dollars worth of business from the European bloc.
And that’s just the start.
The EU’s currency will likely have to be devalued, which means the U will have a harder time paying for imports and services.
That could hurt the U’s exports as well, since the U has become a big source of export income for Europe.
And as Reuters points out, the U could also be facing massive losses in its currency.
“This could have major impacts on U, European and U.N. exports,” the report said.
That would make the Brexit process an even bigger headache for the EU than the referendum itself, which had its own consequences as well for the bloc’s economy.
The Brexit vote will be a huge blow to the EU as a whole, but the effects could also have far-reaching repercussions.
It could cause the bloc to lose an estimated $400 billion worth of exports, according to the IMF, and that’s before we even consider the economic impact of the Brexit.
And even if it does manage to keep the U as its main trading partner, the economic damage would still be huge.
As Reuters notes, the Brexit would be the biggest shock to the U in decades, and if that doesn’t put a dent in the bloc, then we may be looking at another huge financial crisis.