THERE may be trouble ahead for the Northern Ireland economy in 2017, and Brexit could be the least of it, a leading economist has cautioned.
The north's economy, like that it the UK as a whole, ended 2016 in better shape than had been predicted at various points throughout the year as output has continued to grow and jobless numbers have continued to fall. Measures of business confidence often remain positive or break-even and consumer spending growth has been strong.
But Dr Esmond Birnie, senior economist at the Ulster University Economic Policy Centre, warns that the world economy is in a very fragile state, which will have implications for businesses here.
"There is uncertainty in the US, where interest rates may accelerate under President Trump, and in Europe, where its oldest bank is teetering on the brink of collapse, which is indicative of the extent of the bad debt still widespread across many banks especially in the PIGS countries (Portugal, Italy, Greece and Spain)," he said.
"All the design flaws which were inherent in the euro since its creation 16 years ago have come back to haunt us. The euro was a misguided attempt to weld together the monetary policies of countries with fundamentally different economies without at the same time creating a supporting banking, fiscal and political union.
"2017 could the year in which one of the euro’s 19 member states moves towards the exit. At the moment is more likely to be Italy than Greece but much depends on the politics. All this implies that our major export markets in the eurozone (which obviously include the Republic of Ireland) could be very volatile."
He said: "So how best could Northern Ireland’s private sector respond to such pervasive uncertainty? Do what it always does and should do - seek out profitable business opportunities anywhere around the world.
"As for the public sector, perhaps one of the greatest challenges is the management of public expenditure. Is the Northern Ireland state addicted to spending with an inadequate attention to raising revenues within the region to match spending programmes?"
