World Economy

N. Ireland Growth Weakens

N. Ireland Growth WeakensN. Ireland Growth Weakens

The Northern Ireland economy will grow by just 0.2% in 2017, the consultancy PwC has forecast.

It said the result of last month’s referendum, in which the UK voted to leave the European Union, will lead to a slowdown in the UK economy. The firm has also forecast a gradual recovery later in 2017 as immediate post-referendum shock starts to fade, BBC reported.

PwC’s Esmond Birnie said the main reason for the slowdown is projected to be a decline in business investment.

Birnie, who is the firm’s chief economist in Northern Ireland, said investment from overseas would be particularly affected. He added that it is not certain that a recession will be avoided.

PwC said that UK growth had already eased from about 3% in 2014 to about 2% before the EU referendum, due primarily to slower global growth.

However, it added that the vote to leave the EU is likely to lead to a “significant further slowdown” with UK GDP growth forecast to decelerate to about 1.6% in 2016 and 0.6% in 2017.

For Northern Ireland, that means forecast growth of about 1% in 2016, falling to 0.2% in 2017, makes it the poorest-performing of the 12 UK regions.

PwC Northern Ireland chairman, Paul Terrington said that action by the Bank of England should help confidence.

He added that the post-referendum economic downturn should not be anything like as severe as that following the global financial crisis of 2008-9.

“Our main scenario projections suggest that the UK should narrowly avoid a recession over the next year, although we recognize that risks are weighted somewhat to the downside at present.

“If that forecast proves accurate, Northern Ireland should also avoid recession, although that may be a close call,” Terrington said.