Belfast Telegraph

Home Business Brexit

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

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