Indian Journal of Economics and Development

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Impact of Brexit on the Global Economy


Affiliations
1 Intern, Economic Diplomacy Division, Ministry of External Affairs, Government of India, New Delhi 110007, India
 

Objective: To analyze the impact of the United Kingdom’s decision of leaving the European Union on the financial markets, and on the global economy as a whole.

Methods: In this paper, the impact is inspected in a comprehensive manner, by dividing the aftermath into four categories-United Kingdom, European Union, Non-EU European nations, and the world. Parameters such as inflation, real per capita GDP growth, stock and foreign exchange market, current and capital account balance, and strength of the currency have been discussed in this paper, to pinpoint the variable that has been affected the most.

Findings: We see that Sterling has become volatile and has weakened investor confidence, reduced real per capita GDP, immigration has slowed down, and trade deficit has increased. In all, the rate of growth of the economy has decelerated. The prevailing macroeconomic uncertainty has shown ambiguous results for a few variables as of now, but the real picture will become clear-cut and perspicuous once UK actually leaves the EU.

Conclusion: The effects of Brexit will prove to be far reaching, enough to unsettle UK’s markets and the economy for the next few decades. UK will need to adopt certain measures to get out of this economic slump, because as of now, the cons definitely overweigh the pros.


Keywords

Brexit, United Kingdom, European Union, Pound, Euro.
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Abstract Views: 284

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  • Impact of Brexit on the Global Economy

Abstract Views: 284  |  PDF Views: 159

Authors

Subhashini
Intern, Economic Diplomacy Division, Ministry of External Affairs, Government of India, New Delhi 110007, India

Abstract


Objective: To analyze the impact of the United Kingdom’s decision of leaving the European Union on the financial markets, and on the global economy as a whole.

Methods: In this paper, the impact is inspected in a comprehensive manner, by dividing the aftermath into four categories-United Kingdom, European Union, Non-EU European nations, and the world. Parameters such as inflation, real per capita GDP growth, stock and foreign exchange market, current and capital account balance, and strength of the currency have been discussed in this paper, to pinpoint the variable that has been affected the most.

Findings: We see that Sterling has become volatile and has weakened investor confidence, reduced real per capita GDP, immigration has slowed down, and trade deficit has increased. In all, the rate of growth of the economy has decelerated. The prevailing macroeconomic uncertainty has shown ambiguous results for a few variables as of now, but the real picture will become clear-cut and perspicuous once UK actually leaves the EU.

Conclusion: The effects of Brexit will prove to be far reaching, enough to unsettle UK’s markets and the economy for the next few decades. UK will need to adopt certain measures to get out of this economic slump, because as of now, the cons definitely overweigh the pros.


Keywords


Brexit, United Kingdom, European Union, Pound, Euro.

References