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NI to suffer huge contraction but could return to growth in 2021: report

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Danske Bank's Conor Lambe

Danske Bank's Conor Lambe

Danske Bank's Conor Lambe

Northern Ireland is set to suffer a huge economic contraction this year but gradually return to growth in 2021, a new report has said.

And while we’re set to experience a “staggering decline in economic activity in Northern Ireland this year” of around 7.5% there could be a return to growth next year with a 5% increase in output.

That’s according to the latest forecasting for Danske Bank.

“Unfortunately it seems clear that we will experience a staggering decline in economic activity in Northern Ireland this year due to the impact of the coronavirus pandemic on consumer spending and business investment,” Conor Lambe, Danske Bank chief economist, said.

“However, once the lockdown measures begin to be gradually lifted we should see the beginning of a recovery, with the range of recently announced government policy measures supporting the economy to get moving again.

“This recovery should continue into next year and we expect growth in 2021 to reach around 5%.

“It is important to say that, despite the expected return to positive annual growth rates from 2021, total economic output may not return to its pre-coronavirus level until late in 2022 or into 2023.

"In addition, these forecasts are provided in a climate of extremely high uncertainty and the risks around our numbers are weighted to the downside.”