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Momentum of economic recovery under threat, says Finance Department

Published 19/01/2016

Stormont Assembly members debated finance minister Mervyn Storey's near £11.6 billion budget
Stormont Assembly members debated finance minister Mervyn Storey's near £11.6 billion budget

Northern Ireland's economic recovery may be losing momentum, a budget document has revealed.

Forecasters suggest the Northern Ireland economy will continue to grow this year by 1.1%, a slower pace than last year.

Stormont Assembly members have debated new finance minister Mervyn Storey's near £11.6 billion 2016/17 budget but he admitted real-terms funding had been reduced.

A Finance Department budget report said: "There are major national and international headwinds on the horizon, which have the potential to act as a drag on economic performance going forward.

"These factors will combine to further threaten the momentum of Northern Ireland's economic recovery, which already shows some signs of slowing."

Mr Storey said the priorities in the 2016/17 budget were to provide additional funding for health, education and skills as well as key infrastructure projects.

He stressed resources were finite.

"While we have been able to make allocations to address significant pressures facing public services, we are still facing real-terms reductions in funding.

"It is impossible to continually do more with less, so the challenge facing the next Executive is to ensure we are doing the right things.

"In this context, it is imperative that we reform and transformation of the public sector continues. Budget 2016/17 allows that to happen."

The Chinese debt crisis, potential problems over Greek debt, the weak euro and instability in the Middle East have created uncertainties, the budget document added, although the UK economy continues to perform relatively strongly.

"As a small, open economy Northern Ireland is vulnerable to global conditions which are outside of its control.

"The extent to which these factors (e.g. currencies, commodity prices and global demand) affect Northern Ireland's growth prospects will be a key issue in 2016/17.

"In addition, implementation of the Executive's economic priorities,and the delivery of public services more broadly, is set against the backdrop of an increasingly constrained budget position in 2016/17 and beyond."

The budget includes increases in health and justice spending but education is unchanged. Agriculture and the environment face some of the largest percentage cuts.

SDLP and Alliance executive ministers voted against the budget but it was approved by DUP and Sinn Fein ministers.

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