Gordon Lyons also warned that the consequences are likely to be “severe and widespread”.
Highlighting recent analysis carried out by the Centre for Economics and Business Research (CEBR), he added: it “paints a very gloomy picture for the next 24 months”.
He explained: “It is a sad reality that just as we emerge from the damage caused to our economy from the Covid-19 pandemic, we are now plunged into yet another, potentially even more challenging, economic environment as a result of the ongoing situation in Ukraine.
“It would be a mistake to assume that Putin’s invasion will only have a cursory impact on Northern Ireland; we are already seeing a sharp increase in energy and commodity costs, as well as inflation and disruption to our supply chains in some critical areas. Unfortunately, the UK is once again facing an economic shock, the impacts of which are likely to be severe and widespread.
“Recent analysis on the cost of the invasion to the UK Economy, carried out by the Centre for Economics and Business Research (CEBR), paints a very gloomy picture for the next 24 months – albeit one which is based on a number of economic assumptions, all of which will be tested by time and events.
“The impact of the invasion – when combined with other economic factors, including the increase in National Insurance contributions, will be felt in every household. Living standards could drop by an average of £2,553 per household, while inflation is likely to climb towards 8.7% later this year.
“Consumers and businesses across Northern Ireland are already feeling the pain. Energy prices are increasing in large increments with alarming regularity, making the cost of heating our homes and driving our vehicles more and more difficult to meet.”
Turning to the government response, he continued: “It would be foolish to think that these issues can be resolved at a local level, although we clearly have a role to play. We need action not only at a national level, but from countries across Europe who are all facing the same challenges and have some big decisions to take.
“I would call on the Chancellor to act now to help families and businesses across the UK. Collectively we need to take tough decisions to ensure government spending is targeted, strategic and appropriate in order to protect people from the cost of living crisis that is taking a grip across the nation.
“My Department’s own research highlights that households here already spend a greater share (16%) of their non-discretionary expenditure on energy compared to 10% for the UK as a whole. That means Northern Ireland is more vulnerable, compared to other regions of the UK, to increased energy prices and energy expenditure. This amounts to a gathering energy crisis which places in sharp focus – once again – the urgent necessity of moving away from our reliance on fossil fuels.”