Dankse Bank downgrades Northern Ireland economic forecast

Danske Bank has sharply downgraded its forecast for the performance of the Northern Ireland economy next year.

It expects growth in 2023 to be just 1%, having previously forecast 1.7%.

The bank's chief economist, Conor Lambe, said higher inflation and economic uncertainty would be a brake on growth.

He still expects growth of 3.6% this year, though most of that reflects a strong performance in the earlier part of the year.

"The Northern Ireland economy is estimated to have grown again in the first quarter of 2022, but we expect the pace of growth from quarter two onwards to be slower as the squeeze on household incomes intensifies given the high rate of inflation," he said.

"These inflationary pressures are likely to weigh on growth throughout the remainder of 2022 and into 2023."

Earlier this week, estimates from the Office of National statistics suggested the Northern Ireland economy grew by 0.4% in the first quarter of the year.

On Wednesday, a leading economic think tank said the UK economy will grow more slowly than expected this year and will stagnate next year.

The Organisation for Economic Co-operation and Development (OECD) expects the UK economy to grow by 3.6% this year, followed by 0% growth next year.

It means the UK will go from the second-fastest growing economy in the G7 group of industrial nations to the slowest growing in 2023.

The G7 members are the UK, US, Canada, Germany, Japan, France and Italy.

The OECD is a group of countries which aims to assist economic development, raise living standards and promote growth in world trade.

Laurence Boone, the Paris-based think-tank's chief economist, said the UK was being hit hard by a combination of factors, including higher interest rates, higher taxes, reduced trade and more expensive energy and food.