The IMF said the referendum had already created uncertainty for investors and a vote to exit would only heighten this.
Vote Leave said the IMF had been “consistently wrong” in past forecasts
The IMF also cut its UK growth forecast. It now expects 1.9% growth in the UK this year, compared with its January estimate of 2.2%. For next year, it expects 2.2% growth, unchanged from its earlier forecast.
Should the referendum decide in favour of leaving the EU the IMF would expect discussions on post-exit arrangement to be long overdue, which would severely hamper on confidence and investment, all the while increasing financial market volatility”.
It also believes a UK exit from the EU would “disrupt and reduce mutual trade and financial flows” and restrict benefits from economic co-operation and integration, such as those resulting from economies of scale.
Maurice Obstfeld, economic counsellor to the International Monetary Fund and the organisation’s chief economist, says there could be “severe regional and global damage” if Britain were to vote to leave the European Union.
Market volatility could increase, trade could be damaged and economic growth undermined.
Vote Leave, the group campaigning for the UK to leave the European Union, criticised the IMF’s findings saying it had “been consistently wrong in past forecasts about the UK and other countries”.
“The IMF has talked down the British economy in the past and now it is doing it again at the request of our own Chancellor. It was wrong then and it is wrong now,” said Vote Leave chief executive Matthew Elliott.
Source: BBC News