Northern Ireland likely to avoid recession in 2023, forecast says
- Published
The Northern Ireland economy could grow by 1.6% by 2025, a forecast says
Northern Ireland will likely avoid recession this year with growth of 0.3%, the consultancy EY has forecast.
It is in line with other forecasts from Danske Bank and Ulster University which anticipate growth of 0.2% and 0.1% respectively.
EY Ireland chief economist Dr Loretta O'Sullivan said the immediate economy growth outlook is "relatively muted".
She said there are "grounds for optimism into the medium term" citing resilience in the jobs market.
She is forecasting growth of 0.8% next year and 1.6% in 2025.
Official data published last month suggested Northern Ireland's economy may have grown significantly faster than the UK average in the first quarter of the year.
The NI Composite Economic Index (NICEI) expanded by 1.2% over the quarter and grew by 1.7% on an annual basis.
UK gross domestic product (GDP) grew by just 0.1% over the quarter and by 0.2% over the year.
The sets of figures are not produced on a fully comparable basis, particularly when assessing public sector output.
Interest hikes 'taking toll'
The EY forecast says the budget difficulties at Stormont have "paved the way for a scaling back of public services which will impact parts of the private sector too."
It adds that "Bank of England interest rate hikes are taking a toll on the economy as well", and that "households' mood is likely to remain cautious" as a result.
The EY forecast for the Republic of Ireland suggests continued expansion over the next few years "at a more moderate pace" than the exceptional post-pandemic growth.
The forecast suggested Modified Domestic Demand (MDD) will grow by 3.4% this year, 3% next year and 2.8% in 2025.
MDD is a measure of the Irish economy which strips out the distorting effects of activities by multinational companies.
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