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10/05/2016
Brexit Could Slow NI Economic Growth - Danske Bank
The Northern Ireland economy is likely to grow at a slower pace in 2016 as uncertainty over a potential Brexit has dampened local investment levels in the first half of this year, according to new economic forecasts from Danske Bank.
The forecast goes on to predict that should the result of the referendum see the UK staying in the European Union, the NI economy "should grow at 1.6 per cent this year and 1.9 per cent in 2017".
The Quarterly Sectoral Forecast report suggests that Northern Ireland economy will expand by 1.6 per cent this year. This is revised down from the previous report, in which growth of 1.8 per cent was expected. Slow quarterly growth in the run up to the June referendum has been caused by heightened Brexit uncertainty but the report notes that there is no reason the private side of the economy should not bounce back once this risk has abated.
Commenting on the forecast, Danske Bank Chief Economist Angela McGowan said: "We have already seen the economic consequences of heighten uncertainty around Brexit taking its toll on the exchange rate and investment levels. For example, UK commercial property transactions were down 40 per cent in Quarter 1 relative to the same period last year. In addition, last month the UK's manufacturing sector experienced its first contraction since 2013 as uncertainty weighs on this sector. The construction sector has also slowed. However, it would be reasonable to conclude that a UK vote to 'remain' in the European Union will result in any lost or delayed investment being made good in the second half of the year."
(MH)
The forecast goes on to predict that should the result of the referendum see the UK staying in the European Union, the NI economy "should grow at 1.6 per cent this year and 1.9 per cent in 2017".
The Quarterly Sectoral Forecast report suggests that Northern Ireland economy will expand by 1.6 per cent this year. This is revised down from the previous report, in which growth of 1.8 per cent was expected. Slow quarterly growth in the run up to the June referendum has been caused by heightened Brexit uncertainty but the report notes that there is no reason the private side of the economy should not bounce back once this risk has abated.
Commenting on the forecast, Danske Bank Chief Economist Angela McGowan said: "We have already seen the economic consequences of heighten uncertainty around Brexit taking its toll on the exchange rate and investment levels. For example, UK commercial property transactions were down 40 per cent in Quarter 1 relative to the same period last year. In addition, last month the UK's manufacturing sector experienced its first contraction since 2013 as uncertainty weighs on this sector. The construction sector has also slowed. However, it would be reasonable to conclude that a UK vote to 'remain' in the European Union will result in any lost or delayed investment being made good in the second half of the year."
(MH)
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