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Northern Ireland should avoid recession 'but stay poorest part of the UK'

Published 19/07/2016

Esmond Birnie has warned of zero growth by the end of the year
Esmond Birnie has warned of zero growth by the end of the year

Northern Ireland will just about avoid a post-Brexit recession, but remain the UK's poorest region, it was claimed today.

Growth will reach just 0.2% in 2017 and could even slow to zero, PwC NI's UK economic outlook said.

The business advisers said expansion had already slowed from around 3% to 2% ahead of last month's vote to leave the EU.

But now UK growth is likely to decline to 1.6% this year and 0.6% next year.

And growth here in Northern Ireland will be 1% this year - before slumping to 0.2% next year.

That will leave it trailing behind other UK regions, with Scotland tipped for 0.3% growth and Wales for 0.4%.

PwC NI chief economist Dr Esmond Birnie said we could even face zero growth towards the end of this year and the beginning of 2017.

But he added: "Overall UK economic activity is projected to recover gradually later in 2017 as the immediate post-referendum shock starts to fade.

"This scenario suggests that the UK and Northern Ireland would avoid recession, although there are still significant uncertainties around this view."

The slowdown would be a result in a reduction in business investment, particularly from overseas - but any slump was unlikely to amount to the severe recession of the early 1980s or 2008.

Dr Birnie added: "The weaker pound should also boost net exports, which should move from being a drag on overall UK GDP growth in 2015 to a positive contributor in 2017."

Consumer spending could slow down as a result of the weaker pound pushing up import prices, he said.

Belfast Telegraph

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