Economic effects of Brexit on the German and European economy - updated estimation considering current developments

This study aims to quantify the economic effects of the United Kingdom’s (UK) exit from the European Union (EU) on the German and European economy. It first described the changes in the economic relations between the UK and the EU since the Brexit referendum in 2016 and puts current developments and possible scenarios into their economic context. The ifo simulation model is then used to quantify the economic effects of either a hard or soft Brexit on the German and European economy. In both scenarios, there will be negative effects on the real GDP of Germany, the UK and the remaining EU member states, on the exports of the German goods industry, as well as changes of sectoral value creation leading to negative effects especially for the automobile industry and service sector.