The Spring 2015 forecast has been published by the Ulster University Economic Policy Centre.
It says the NI economy had a relatively strong 2014, with increasing employment levels supporting high levels of consumer and business confidence.
Lower oil prices had a positive impact for consumers and businesses.
The report says that as a result, 2015 should also deliver relatively strong economic growth.
However, it adds: "Given the surprising Conservative Party majority (albeit slender) in the general election, the key trajectory of government spending over the period of this new Westminster parliament remains on a downward trend.
"Therefore the central theme of the UUEPC Spring 2015 forecast is one of austerity and its likely impact on growth.
"In contrast to many other forecasts, UUEPC expect economic growth in the medium term to slow in Northern Ireland (a feature of our forecasts for some time) as the private sector moves to take up the slack created by lower government spending."
The forecast predicts that gross value added (GVA), the preferred measure of economic activity, will drop from 1.9% in 2015 to 1.3% in 2018.
It also says that the growth in house prices will slow from 7.1% in 2015 to 5.5% in 2018.
The report also predicts a slight rise in unemployment between 2015 and 2018.
Northern Ireland will see relatively strong economic growth in 2015, but it is likely to slow in the following years, a new report says.