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Northern Ireland economy predicted to grow by almost 6% in 2021

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EY has predicted Northern Ireland will bounce back from Covid-19 economic losses this year and next year

Northern Ireland's economy will grow by almost 6% in 2021, economists at the EY consultancy firm have estimated.

It also believes the bounce-back from the Covid-19 pandemic will continue in 2022 with estimated growth of 4%.

However, it has cautioned that it could be 2024 before all the jobs lost during the crisis are replaced.

EY also warned consumers could soon face higher prices with inflationary pressures growing across the economy.

The forecasts assume the continuing success of the vaccine rollout with most restrictions being lifted by the summer.

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EY said the recovery would be dependent on people coming off of support payments being able to find work

EY estimates the Republic of Ireland's slower reopening means it will grow by about 5% this year and 4.6% next year.

'More adverse outlook'

EY said the key unknown for the labour market is how many of the people on government support schemes will find their way back into work when supports are removed later in the year.

"If, for example, 10% of those on full-time furlough in Northern Ireland and on PUP (Pandemic Unemployment Payment) in Ireland became unemployed, this would be equivalent to an increase of roughly one percentage point in the official unemployment rate in NI and nearly two percentage points in Ireland," said the consultancy firm.

"With structural reviews underway within many major employers and continued uncertainty over the type of retail and tourist sectors that will emerge in the future, it is possible to generate a much more adverse outlook for the path of unemployment."