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Britain's exit from European Union

Date: 25 Jun 2016   Posted By: Deepa Venkitesh     Group: Opinion About    Category: Miscellaneous   

How will Britain's exit from the European Union affect the World and Indian economy in general?
The gold rate did go up and the stock market was affected as well.
Wanted to know from a layman's point of view.
Awaiting response.

Wondering about the impact of Britain's exit from the European Union? Find responses from experts on this page.

Author: Ratnesh Sharma    30 Jun 2016      Member Level: Silver     Points : 4  (Rs 4)    Voting Score: 0

Britain's exit from European Union would not be a fair affair for any of the large economies in the world. However, the impact on the world and India, in particular, largely depends on how smooth the transition is for Britain. Post Brexit negotiations like British presence in the EU integrated market or special permissions for EU nationals and companies to stay and work in Britain could do some damage control, but the possibilities of this looks dim.
The Brexit process could last as long as two years as British are reluctant to leave without any future framework in place but since they have to honor the vote, they are finding the best possible option.
Indian government is in "wait and watch" position as the final negotiated Britain has not arrived yet.

1. Impact on Gold :-
Although nothing could be said at the moment, Gold prices are likely to plunge as China, the largest gold consumer is believed to be hit hard post Brexit and thus decrease demands can put the prices to new lows. Most of the Chinese companies of EU are headquartered in London so Brexit would be imminent challenge for China.

2. Impact on India:-
Same applies for India as most Indian companies in EU are headquartered in London too. Moreover, our huge foreign reserve which saw a boom in last year may witness the reverse trend and foreign investors may pull their money from Indian markets amidst this risky global chaos in market.

3. Layman's point of view:-
On common man, the impact largely depends on OPEC countries response to Brexit. There may be new lows in the market and production war start again between Iran and Saudi Arabia. This may lead to lowered prices of oil, hence cheaper imports, hence cheaper transport, hence cheaper food and so on. And if Iran and Saudi reaches a deal all the cases would be vice versa hence not good for common man.

Overall, the impact largely depends on the post Brexit Britain. How strong it is and how efficiently they negotiate with European Union would be worth watching.

Author: Partha Kansabanik    05 Jul 2016      Member Level: Diamond     Points : 3  (Rs 3)    Voting Score: 0

Britain's exit from European Union (BREXIT) will make the European economy as well as the share market in European countries extremely volatile for at least six months. As a result, Indian economy will definitely be benefitted. This is being reflected in the share market of the country for the last five days. The experts feel that the BREXIT will not be good for China also.

So far as gold price is concerned, BREXIT will have negative impact on gold price in China, which is the largest gold-importing country of the world. On the other hand, the impact of gold price in India can't be stated for sure. Five days after the referendum in Britain, no visible impact could be seen on gold price in Indian market.

Overall, the experts feel that BREXIT will open the doors of new opportunities before Indian economy.

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