The economy in the north will grow by 1.1% this year, strengthening to 1.8% in 2025, a new forecast from EY has predicted.
That eclipses its previous forecasts for the region in February, where the respective numbers were 0.7% and 1.6%.
But that is still at snail’s pace when compared to the Republic, where its domestic economy is set to grow by 2.3% in 2024, rising to 4.3% next year.
The predictions come in the latest EY Economic Eye, which also forecasts that employment in the north will increase by 1.0% in 2024 and 0.7% in 2025.
EY Ireland chief economist Dr Loretta O’Sullivan says: “Our forecast for Northern Ireland is favourable in the main, with easing inflation lessening the squeeze on households’ purchasing power, employment solidly expanding, and financing conditions improving thanks to interest rates gradually reducing.
“The Stormont Executive’s commitment to growing the economy now and into the future is welcome. Boosting productivity will be key for Northern Ireland as it works to realise its full potential.”
Rob Heron, EY Northern Ireland managing partner, added: “It is encouraging to see a more positive outlook for the Northern Ireland economy for this year and 2025.
“With a strong pool of highly skilled talent available across Northern Ireland, we are well positioned to continue the upward trajectory of increased employment and growth in our economy.
“We know from talking to our clients that Northern Ireland’s unique access to both Great Britain and the European Union market for goods post-Brexit is providing a significant opportunity for businesses operating here.”
The Economic Eye says the Irish economy is continuing to perform well in spite of flat headline GDP, with strong domestic growth and buoyant tax receipts, combined with record numbers in employment and low inflation for the rest of the year and into 2025.
“Right now, the vibes the Irish economy are giving are pretty good,” Dr O’Sullivan adds.
“Consumers are spending, businesses are hiring, exports are rebounding, and tax receipts are buoyant.
“While GDP is exhibiting some weakness, a host of other metrics indicate that the economy is doing well. Modified Domestic Demand was up in the first half of the year, inflation is back at rates consistent with price stability, the unemployment rate is low, and the tax take is high. There are headwinds of course, some external and some home-grown, but the growth outlook is favourable in the main.
“Job and wage gains are expected to continue over the forecast horizon, supporting consumer spending, with a ‘Budget boost’ in the offing for households next week.”