Briferendum Series: OECD Joins Band of Brexit Warner
After U.S. president Barrack Obama’s endorsement for the stay campaigners, Organization for Economic Cooperation and Development (OECD), is the latest to join the list of Brexit warners.
Ángel Gurría, OECD’s secretary General said, cost of leaving European Union, for general public would be equivalent to losing out one month’s salary, within four years. It will reduce confidence in UK’s economy as well as lead to a major reduction in spending.
OECD’s report says, an exit will lead to 3% reduction in potential GDP of UK’s by the end of decade and it will also be a knock of 1% for EU economy, relative to the scenario, where UK stays within bloc. In the longer run, it is expected to be even larger, somewhere around 5%, due to loss of competiveness, lack of immigration of skilled migrants and lower foreign direct investment. Another area of suffering would be lower tax revenue, due to loss of business, which will lead to bigger fiscal deficit, outweighing any benefits of additional savings by leaving European Union. The effects, according to the organization, could reverberate for long and deterioration could continue until 2030.
In recent days, Barrack Obama, UK treasury, Bank of England, IMF, all have warned again Brexit.
Pound has also gained somewhat on weaker Dollar and contrarian hope for a stay vote. Pound is currently trading at 1.459 against Dollar.