31/07/2012

Northern Bank Makes Gloomy NI Economy Predictions For 2012

Northern Bank has downgraded its 2012 economic forecasts for Northern Ireland, predicting that the economy here will grow by just 0.1% for the rest of the year.

The estimate has dropped from 0.3% after a slow few months, with the European debt crisis holding growth back.

Northern Bank's chief economist Angela McGowan told the BBC that despite this, the impact of the European downturn would not be as bad in Northern Ireland as in the rest of the UK.

She said: "This is simply because Northern Ireland's private sector is small and its export base limited."

The most recent quarter has seen the UK economy as a whole shrink much more than expected.

Gross Domestic Product (GDP) fell by 0.7% in figures for economic output in the second quarter of 2012.

That means we are into a third quarter of the second dip of this recession, which has naturally impacted Northern Bank's forecast.

The Northern Bank predicts that Northern Ireland's construction sector will contract by 2.58%, but other sectors such as IT, agriculture and hospitality are faring better.

As inflation falls back, people will have more disposable income.

However, Ms McGowan thinks that depending on domestic markets is still a risky strategy.

"Although conditions are difficult, significant export opportunities still exist in emerging markets," she said.

(NE)

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