The north’s biggest lender has marginally upped its growth forecast for the local economy this year.
Danske Bank expects the Northern Ireland economy to expand by 1.1% in 2025 and into 2026, with both domestic and global factors continuing to weigh on growth.
The bank previously forecast just 1% growth for this year.
Danske expects growth in Northern Ireland will fall behind the wider UK economy, which it anticipates will grow by 1.3% in 2025.
It comes as the UK’s inflation rate continues to trend above both the Bank of England’s 2% target and the 2.9% annual wage growth in Northern Ireland, putting pressure on households.
The latest economic forecast from Danske Bank.
Danske Bank said it expects the growth rate for jobs in Northern Ireland to average around 1.5% this year.
But it anticipates that will slow to just 0.4% in 2026.
“Economic growth is expected to remain relatively modest in both Northern Ireland and the wider UK,” said Danske Bank’s chief economist, Conor Lambe.
“Business taxes are higher, inflation is running above target and uncertainty around fiscal tightening is increasing.
“As such, there will be significant attention on the measures announced in the Chancellor’s upcoming Budget in November.
“Alongside these domestic factors, uncertainty related to global trade policy and geopolitical developments also remains elevated.”
Danske Bank expects the ‘information and communications’ sector will be north’s best performer in 2025, growing by around 1.8% this year and 2% into 2026.