Global economy ‘will recover within a year’
The global economy is likely to be out of recession by the autumn, a Northern Ireland economist has told business leaders.
Northern Bank chief economist Angela McGowan said that, based on research from the bank’s parent company Danske Bank, the global economic recovery in 2009 will be stronger than first expected, with the recession ending in the third quarter of the year.
Speaking at the Business Answers for SME’s roadshow to an audience of small business owners, Ms McGowan said a combination of low inventories at global level and record government stimulus packages across the world have provide “a powerful cocktail for growth” that will in turn boost the Northern Ireland economy over the next 12 months.
She said: “We expect that recovery will first emerge at a global level before we see visible signs of recovery at a local level.
“The research indicates that the theme of global recovery is set to continue in the coming quarters of 2009. The improvements are likely to be strongest in the US and Asia towards the end of 2009.
“While we are quite confident in the recovery over the next couple of quarters there are still challenges for the world economy when we look into 2010.
“When production is back in line with demand, the future path for GDP growth will ultimately depend on growth in demand — and most importantly private consumption.
“At a local level this will require further improvements in consumer confidence before demand and consumption picks up across the economy as a whole.”
But the economist added that the prospects for a global economic recovery as forecast in Danske Group’s research also bode well for local businesses.
“When global conditions start to improve foreign investors will return to seeking out investment opportunities and Northern Ireland will be among those competing for foreign direct investment. The local export base can only benefit from an upturn in global economic conditions enabling local firms to seek out and expand into international markets.
“As normality slowly returns to the world economy both business and consumer confidence should start to improve.
“When this happens we could see demand for local goods and services moving to a more sustainable level,” she said.
Keynote speaker at the June 15 SME roadshow, organised by Hewlett-Packard, in the Lodge Hotel, Coleraine, is Will McKee.