Published Wednesday, 25 January 2012
The Office of National Statistics confirmed the news on Wednesday for the period between October and December.
The contraction was the subject of dispute in the House of Commons during Prime Minister's Question Time.
It’s great news for companies in NI that are exporting and manufacturing firms – the problem is we just don’t have enough of those
UTV’s Business Editor Jamie Delargy
The Labour Party's Leader of the Opposition Ed Milliband accused the Prime Minister David Cameron and Chancellor George Osborne of "self-satisfied, smug complacency" for their handling of the economy since coming to power nearly two years ago.
David Cameron rejected the criticism and said: "This is the year we have to take further action to get our economy moving, but the most important thing is to have a credible plan to get on top of the deficit which has given us the lowest interest rates for over a hundred years."
Northern Bank chief economist Angela McGowan says the global economy will expand in the year ahead.
She said: "We'll see an improvement in the emerging markets and in china, that makes a big difference, so we'll see the US and China leading the growth.
"But there's no doubt about it, there are risks out there. The euro-zone sovereign crisis is one of the risks that still remains and it will continue in the year going forward, but we don't believe a collapse in the Euro is the ultimate outcome."