Published Tuesday, 22 September 2009
The Stormont Executive is lagging behind its Scottish counterpart in responding to the downturn, according to the First Trust Bank's latest Economic Outlook and Business Review.
The review said it would be "prudent" for them to start the ball rolling by carrying out a review of their Programme for Government.
The Executive was warned it will have to make some hard decisions about public spending after the impending General Election which is expected to herald cost cutting in Westminster.
'Proactive'
"In comparison to the local Scottish administration's response to the global economic crisis, Northern Ireland's policymakers have been much less proactive," said Mike Smyth, head of the School of Economics at the University of Ulster in the review.
He said that while in Scotland the Executive produced a National Recovery Plan in August 2008, which had since been revised as national and international economic conditions altered, local policy makers had been less proactive.
"The Programme for Government and Budget remain largely unchanged since their publication in January 2008, with only some limited responses from individual departments.
"In the context of increased pressures on the NI Executive's budget at this time, with future public sector funding pressures still pending, it would seem prudent for the Northern Ireland Executive to finally start the ball rolling by initiating a review of the Programme for Government and Budget," said Mr Smyth.
Latest evidence suggested that the Northern Ireland economy has been less severely affected by the downturn that many other regions of the UK, he said.
Mr Smyth added: "While this is also in stark contrast to the economic conditions experienced in the Republic of Ireland, the likelihood of future national spending cuts post General Election means that the Northern Ireland Executive will finally have to make some difficult decisions about public services, as well as about Northern Ireland's investment strategy and wider public sector employment."
The report said in terms of the overall economic outlook it was important to remember the recent loss of output and jobs had been far less painful that the experiences of the early 1980s when unemployment rose to some 125,000 - more than double the current level - and mortgage rates hit 17% and inflation peaked at 15%.
Mr Smyth said while it looked as if the Northern Ireland economy was likely to remain flat during the second half of 2009, there were signs consumer confidence and business confidence were now less weak.
First Trust's senior manager of global treasury services Philip Major said Northern Ireland had achieved much in recent years, but added: "Now facing unprecedented challenges in the economy, it is time to step up a gear."