N Ireland economy to slow down after Brexit result: PwC

19 Jul 2016


The Northern Ireland economy would grow only 0.2 per cent in 2017, according to the projection of the consultancy PricewaterhouseCoopers (PwC).

It added the result of last month's referendum, in which the UK voted to leave the EU would lead to a slowdown in the UK economy.

The firm had also forecast a gradual recovery later in 2017 with the post-Brexit shock starting to fade.

According to PwC's Esmond Birnie, the main reason for the slowdown was a projected decline in business investment.

According to Birnie, the firm's chief economist in Northern Ireland, investment from overseas would be particularly affected.

He added that it was not certain that a recession would be avoided.

According to PwC, UK growth had already eased from about 3 per cent in 2014 to about 2 per cent before the EU referendum, due primarily to slower global growth.

However, it added that the vote to leave the EU would likely lead to a "significant further slowdown" with UK GDP growth forecast to fall to about 1.6 per cent in 2016 and 0.6 per cent in 2017.

For Northern Ireland growth was projected  about 1 per cent for 2016, falling to 0.2 per cent in 2017, making it the poorest-performing of the 12 UK regions.

"Quarter-on-quarter GDP growth could fall to close to zero in late 2016 and early 2017 in this main scenario, but is then projected to recover gradually later in 2017 as the immediate post-referendum shock starts to fade," PwC said. In an alternative scenario, UK economic growth could come in anywhere between +1.5 per cent and -1 per cent next year, it added.

"But even this latter relatively pessimistic scenario would not be a severe recession of the kind seen in the early 1980s or in 2008-9," the firm said.

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