Northern Ireland economic growth 'to slow down in second quarter'

The bank is forecasting that inflation will average around 8.5% this year.

The pace of economic growth in Northern Ireland is to slow down in the second quarter of this year as consumer spending is squeezed by high inflation, according to Danske Bank.

The bank's latest report forecasts economic growth of 3.6% for 2022, but it lowered its forecast for next year to 1% from a previous prediction of 1.7%.

It expects the rate of price rises to increase further and is forecasting that inflation will average around 8.5% this year and 4.5% in 2023.

“The Northern Ireland economy is estimated to have grown again in the first quarter of 2022 but we expect the pace of growth from quarter two onwards to be slower as the squeeze on household incomes intensifies given the high rate of inflation," said the bank's chief economist Conor Lambe.

"These inflationary pressures are likely to weigh on growth throughout the remainder of 2022 and into 2023.

“Our forecast for the annual rate of economic growth in 2022 is unchanged from our last report at 3.6% though it is important to note that this projection still reflects an element of the recovery from the coronavirus pandemic.

"However, our growth forecast for 2023 has been revised downwards."