Economy 'to grow by under 1%' this year

Northern Ireland's economy is expected to grow by just 0.7% this year as higher energy costs hit businesses and consumers, the consultancy EY has said.

The outlook is in line with those from other forecasters, such as Ulster University, who expect growth of less than 1% this year.

EY said that business surveys at the start of the year had pointed to expanding private sector activity in NI.

The impact of the US-Israeli war on Iran has since added cost pressures and uncertainty.

For example heating oil prices in Northern Ireland rose by a record 92% in March.

Around two thirds of Northern Ireland households use home heating oil.

Rob Heron, managing partner at EY Northern Ireland, said: "Northern Ireland's economy continues to show resilience, but growth is increasingly constrained by global volatility, impacting costs, confidence and investment decisions."

EY is forecasting that the Republic of Ireland's domestic economy will grow by 2.7% this year, using a measurement which strips out the distorting impacts of multinational companies.

That compares to exceptional growth of almost 5% in 2025.

Dr Loretta O'Sullivan, chief economist at EY Ireland, said: "Last year saw a very strong performance by the Irish economy, beating all forecasts, and it is only to be expected that this would unwind somewhat in 2026.

"Combined with the impact of the conflict in the Middle East on the global energy market and the world economy, we are projecting more moderate but still decent growth this year, something many of our peer nations will not be expecting."

One caveat to these forecasts is they are made against a backdrop of extreme uncertainty.

There are a lot of things which could go dramatically wrong in the world economy which would overtake the assumptions in economic models.