The Northern Ireland economy was still growing at the end of last year but showed signs of losing momentum, official data suggests.

It comes amidst growing worries about the economic impacts of the US-Israeli war on Iran.

On Thursday an influential global policy group forecast UK growth of just 0.7% this year, down from a previous outlook of 1.2%.

The Organisation of Economic Co-operation and Development (OECD) said the UK is facing the biggest hit to growth among major economies.

The Northern Ireland data suggests the local economy grew by 1.6% over the course of 2025.

That was mainly due to a strong performance in the second quarter of the year with growth slowing from the summer onwards.

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Between the third and fourth quarters of the year growth was just 0.2%.

The services sector, which has been the engine of growth since the pandemic, saw output fall during the fourth quarter.

The NI economy is measured using the Northern Ireland Composite Economic Index (NICEI) which is similar to GDP.

Stormont's economy minister, Caoimhe Archibald, welcomed the figures saying they demonstrated the resilience of local businesses and workers facing an "increasingly uncertain economic situation" due to fighting in the Middle East.

'Outperformance overstated'

Richard Ramsey, economist at Queen's University business school, said the data showed that the performance of the NI economy in 2025 was not as robust as previously thought.

"The biggest takeaway concerns the revisions to previous data," he said.

"Over the last six months, economists and business leaders were surprised at the scale of Northern Ireland's apparent economic outperformance.

"The latest NICEI figures confirm that the scale of NI's economic growth outperformance isn't as large as previously stated.

"It is now revealed that private sector output contracted in the third quarter of 2025 by 0.7% as opposed to expanding by +1.2%. Private sector services contracted in the last two successive quarters in 2025."

Jobs market data, which is more up to date, suggest the NI economy was still creating jobs in recent months.

The HMRC figures estimate there were almost 821,000 people on company payrolls in February, up by around 4,000 since December.

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