Belfast Telegraph

Mini budget 'won't be necessary'

A mini budget should not be needed this year, the Central Bank has said as it issued broadly-unchanged forecasts for the economy.

Estimates for 2012 remain on course, with growth of 0.5% mainly due to sluggish consumer spending dragging back the figures.

The second quarterly bulletin also warned that the value of business done by homegrown firms is likely to be hit again this year and fall by 0.7%.

Gross domestic product, which measures the value of all companies including foreign multinationals, is expected to grow by 2.1% next year.

"The underlying narrative behind the data has not changed, with the positive impulse to growth coming exclusively from the external side and being largely offset by a continuing drag on demand from domestic sources," the report said.

"The external slowdown in the latter part of last year did impact on the performance of exports, although perhaps not by quite as much as might have been expected."

The Central Bank said that, based on the available economic and fiscal data, a mini budget is not likely at this stage. But it warned: "Continued monitoring of the situation is necessary, especially in light of the exposure of the economy to external developments."

The bank also called for more progress on economic reform and said this could be achieved on two fronts - improved competition in certain private sector services and keeping up public sector reform.

"If the challenges in these areas are met, then the prospects are good for a further strengthening of the economy's competitiveness position and its trading performance," the bulletin said.

"This should gradually encourage greater confidence and a subsequent pick-up in the overall pace of growth to levels that will permit unemployment to be steadily reduced and living standards to rise again at modest but sustainable rates."

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