Economic forecast for North revised downwards
Danske Bank highlights ‘severe consequences’ in event of no-deal Brexit
Economic icebergs: The Titanic Experience in Belfast, a key tourist attraction in the North. Photograph: Bryan O’Brien / The Irish Times
Northern Ireland’s economy will not grow as fast as was expected in 2019, with growth rates likely to fall back to just 1 per cent, according to revised forecasts from Danske Bank.
The bank had previously forecast growth of 1.2 per cent this year in Northern Ireland but it has said that heightened uncertainty around Brexit combined with the lack of a power-sharing executive has been a drag on economic growth prospects.
In its latest Northern Ireland quarterly sectoral forecasts report, Danske Bank’s chief economic Conor Lambe said that while there will still be growth – underpinned by the services sector – the outlook for the North was uncertain.
“Given that [the British] parliament does not support a no-deal Brexit, the UK leaving the European Union without a deal is an unlikely outcome. However, it is still a possibility and if it were to occur, it would have severe consequences for both the UK and Northern Ireland economies.
“We continue to believe that the UK will eventually leave the EU with a deal but a number of outcomes are still possible over the months ahead, including a further extension of the article 50 process, a second referendum or a general election,” Mr Lambe said.
“With high levels of uncertainty continuing to linger, Brexit remains a drag on economic growth and it poses a significant risk to Northern Ireland’s future economic prospects.”
He said the added impact of political instability in the North while the Stormont executive remains collapsed was another key factor to consider.
“Businesses and consumers are continuing to express concerns about the lack of political stability in Northern Ireland, with investment decisions and confidence being negatively affected by the uncertainty,” Mr Lambe warned.
Danske estimates that employment growth in Northern Ireland will slow to 0.5 per cent this year and to 0.3 per cent in 2020.
It has also forecast that the North’s economy could grow overall by 1.3 per cent next year.