Big four accounting firm KPMG has predicted north west economic growth will contract greater than expected in 2020.
The region’s economic growth is forecast to contract 9.4 per cent in 2020, according to the firm’s latest quarterly Economic Outlook.
The analysis further downgrades forecasts for the region’s economic prospects from the 7.6 per cent predicted in June.
However, KPMG said growth in the region is predicted to pick up to 8.2 per cent next year if a Covid-19 vaccine is rolled out by April, with the economy reaching pre-Covid level by early 2023.
Warren Middleton, office senior partner for KPMG in Manchester, said the latest forecast highlights the “scale of uncertainty facing the country over the coming months”.
“The next six months could provide the greatest challenge as the business community wrestles with both the ‘new normal’ of COVID-19 and a potential hard Brexit,” he said.
He has called for business and local authorities to work "collaboratively and set out a clear action plan to restore consumer confidence and long-term, sustainable economic growth".
“Across the country there appears to be some significant differences in the forecast short-term impact of coronavirus, which raises concerns that we could face a ‘two-speed’ recovery with some regions struggling to regain lost ground."
UK-wide, KPMG has forecast a GDP decline of 10.3 per cent for 2020, downgraded from 7.2 per cent predicted in June, with growth of 8.4 per cent in 2021.
KPMG said it is working on the assumption that a vaccine will be approved in January before it is rolled out by the end of April, enabling all social distancing measures to be removed.
But KPMG said even a three-month delay in rolling out the vaccine could see UK GDP growth fall to 7.1 per cent in 2021.
