Let’s all move forward together in 2025

There was plenty going on politically during 2024, with a huge number of countries across the globe undergoing elections.

Although the new Labour administration in the UK has had its feet well under the table for nearly six months now, we are yet to see how other new governments and cabinets will unfold in several countries around the world. Important ones to watch include the US and Ireland and, of course, we cannot forget about the recent developments in the French political landscape which created a bit of a wobble for the EU’s second largest economy.

Despite the political instability, the IMF reported that the global economy continued to grow during 2024 by 3.2%, with 3.3% growth expected in 2025.

Of course, the variation in growth between countries is huge, but in the Economist magazine’s recent article “Which economy did best in 2024″; countries like Spain, Ireland and Denmark were awarded top performance positions when ranked on five economic and financial indicators. These included GDP, stock market performance, core inflation, unemployment and government deficits.

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On the other hand, Turkey, Latvia and Estonia trailed at the bottom of this economic performance league. The UK came in 31st out of the 37 countries that were compared. Weak GDP, higher inflation, a relatively large deficit and poor share price performance, all worked to drag the UK down in the rankings. GDP growth in the UK was estimated to be 1.1% in 2024 but is forecast to grow by 1.6 per cent in the year ahead.

Like the rest of the UK, Northern Ireland struggled to gain economic traction over the last 12 months. But on a positive note, this region can be held up as a beacon of political stability with the return of the Executive last February. Although it cannot be easy reaching a compromise on the best way forward with a four-party coalition, so far it has been achieved, and the publication of a Programme for Government last September was widely welcomed by the business community.

There is also an expectation that we will see the publication of the long-awaited Investment Strategy for Northern Ireland (ISNE) in January; this document will set out the region’s capital investment priorities with attached funding plans. It is a hugely important document for the business community, who have long called for a strategic approach to infrastructure delivery. The public perhaps underestimate just how critically important this forthcoming document will be for shaping their living standards.

While the Executive brought a degree of stability to Northern Ireland in 2024, the business community was unfortunately hit with a relatively harsh blow from the UK’s October budget. Rising employment costs and insufficient support for companies to transition to low carbon left many business leaders accusing the UK Government of stifling growth, employment, and investment. The CBI is therefore urging the government to move towards co-designed policies and work with business to ease the budget pressures, restore confidence, and provide headroom for investment.

Our recently published report entitled “Blueprint for UK Competitiveness” was designed to guide policy-makers, industry leaders, and stakeholders in transforming the current economic challenges into opportunities for sustained growth. In this report the CBI has identified a ‘five-by-five’ model which sets out how the five largest economic shifts in the UK economy could be turned into areas of competitive advantage.

The five major economic shifts that the CBI argue can significantly impact growth on the horizon include: 1) Funding competitiveness through deeper capital markets and an agile fiscal policy framework. 2) Delivering on the UK’s net zero targets through sustainable investments and regulatory innovation. 3) Evolving the UK’s labour market, ensuring the right balance of skills, health, and productivity for future growth. 4) Harnessing digital technology, particularly AI, to revolutionise both the public and private sectors and 5) Balancing economic security with international trade policy to secure the UK’s position in an increasingly protectionist world.

The report contains a myriad of policy tools and recommendations for making the most of these economic shifts. CBI suggestions are wide-ranging from improving the Home Office Visa system to support for Technology Adoption and widening health tax incentives for employees.

Thus, on the economic front there is clearly plenty to be done, and some good reasons to be optimistic about what can be achieved in the year ahead with the right collaboration and ambition. However, the true test next year for all of us will most probably be on the political front. Whilst we know that political stability is a key determinant of economic progress, we must recognise that the challenges right now on the world stage are enormous. Our hope is that newly elected world leaders will be focused on peace building and co-operation.

At the same time, we should be grateful that local political leaders have chosen to work together in a coalition-based Executive so that peace and prosperity can be delivered. That is a difficult job that should not be under-estimated - but is often forgotten when problems emerge.

Our politicians won’t get everything right in 2025. Let’s face it – who does? But in an increasingly polarised world, the Executive does deserve recognition for doing their very best, collaborating and working across political divides. The business community must keep this in mind in the year ahead, we need to support political leaders and focus on bringing solutions to the Executive’s table.

At the same time, politicians must be open to having those quiet conversations about where things could be improved and explored from a different perspective. As the saying goes “if you want to go fast go alone, if you want to go far, go together.”

• Angela McGowan is director of CBI Northern Ireland