Northern Ireland

Danske Bank upgrades NI growth forecast again

Danske Bank in Belfast
Image caption Danske Bank is one of the 'big four' banks which dominate the Northern Ireland economy

Danske Bank has again upgraded its growth forecast for Northern Ireland as the economy has performed better than it expected after the EU referendum.

The bank now expects growth of 1.2% this year compared to the previous forecast of 0.8% and an original forecast of just 0.5%.

However, it expects the growth rate will slow to 1% in 2018 as inflation hits household spending power.

Many economists have revised short-term forecasts after the Brexit vote.

Danske Bank economist Conor Lambe said: "There were a number of positive data releases for Northern Ireland which pointed to a very strong end to 2016.

"And, on the whole, the data for the beginning of 2017 suggests that the economy continued to grow during the first three months of this year.

"Taking all this into consideration, we have revised our forecast for economic growth in 2017 up to 1.2%, though we do anticipate a slight slowdown in 2018."

Prospects weakening?

Mr Lambe said that despite increasing inflation, he still expects consumer spending to drive growth this year.

He is forecasting growth of almost 3% in the hospitality and leisure sector and more than 2% in the retail sector.

Meanwhile, a survey of 315 chartered accountants across all sectors of the Northern Ireland economy suggests they believe Northern Ireland's economic prospects are weakening.

The survey by Chartered Accountants Ulster Society found that its members regarded political uncertainty and Brexit instability as key issues likely to affect the economy over the next 12 months.

Cuts in government spending, concerns around the increasing cost of doing business and rising inflation also featured as negative factors affecting Northern Ireland's economy.

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