World Economy

N. Ireland Economy to Grow by 1%

N. Ireland Economy to Grow by 1%N. Ireland Economy to Grow by 1%

The Northern Ireland economy will grow by just 1% in both 2017 and 2018, economists forecast. The Ulster University economists expect business investment will be delayed or cancelled as a result of policy uncertainty around the Brexit process. 

However, they predict that consumer spending will remain solid, allowing the economy to avoid recession. They caution the effects of Brexit and a Trump presidency mean “significant uncertainty” for forecasts, BBC reported.

The economists believe that as greater certainty emerges, growth rates will increase towards the end of this decade. They expect the growth rate for 2016 to be just under 2%, which by recent standards is a reasonable performance.

Meanwhile, businesses in Northern Ireland generated more than £20 billion ($25.47 billion) for the economy last year for the first time, fresh figures have shown.

The total level of gross value added, which includes the revenue created by businesses in this country, rose by 1.8% in 2015, based on the period a year earlier. Turnover for Northern Ireland businesses increased by 0.7% between 2014 and 2015 to £66.7 billion, while the cost of purchases of goods, services and energy declined by 0.8% to £43.4 billion.

Employment levels also increased by 2.3% in 2015, according to the figures from the Northern Ireland Statistics and Research Agency. Overall, growth was driven by increases in construction and services sectors. Employment in the manufacturing section showed continued growth of 3.9% between 2014 and 2015.

The forecasts also predict that UK inflation will increase sharply to more than 3% in 2017 and will reach 4% in 2019. In response, they expect interest rates to rise from their historic lows and reach 3% by 2019.

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