IMF warns of 'severe' economic damage from Brexit

The International Monetary Fund has warned of potentially "severe" economic damage from a British exit from the European Union.

It also voiced strong worries over generally deteriorating support for EU integration.

"Across Europe, the political consensus that once propelled the European project is fraying," said IMF chief economist Maurice Obstfeld.

He added that a broader backlash against economic integration "threatens to halt or even reverse the postwar trend of ever more open trade."

Mr Obstfeld aslo said the possibility that Britain votes to leave the EU was "very real".

He said Europe's refugee crisis, combined with attacks by Islamic militants, had resulted in a "rising tide of inward-looking nationalism" in the region.

"One manifestation of increased nationalism is the very real possibility that the United Kingdom exits the European Union, damaging a wide range of trade and financial relationships," he said.

In a half-yearly assessment of the world economy, the IMF listed the 23 June in-out referendum as a key risk alongside instability in China and other emerging markets, volatile share prices and a loss of long-term growth potential in advanced economies.

"The planned June referendum ... has already created uncertainty for investors," Mr Obstfeld said. "A Brexit could do severe regional and global damage by disrupting established trading relationships."

The IMF also cut its 2016 growth forecast for Britain to 1.9% from 2.2%, the sharpest downgrade for any major advanced economy other than Japan...
  [rte.ie]
12/4/16
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Related:

• Brexit to be costly for Britain (CBI survey) 

• Majority of Britons favor to quit EU (new poll)