The Western Development Commission says both Covid and Brexit have had a disproportionate impact in the region.
The Commission says this is because of the relative importance of sectors such as agriculture and tourism in the western counties.
Ahead of the publication of the revised National Development Plan which sets out strategy to develop the country up until 2040, the WDC says the plan needs to provide conditions for sustainable development.
It also says the plan must expedite the roll-out of high-speed broadband, as well as physical infrastructure to enhance regional connectivity and accessibility.
Luke McGrath is an economist with the Policy Analysis Team at the WDC.
He says while western counties have become a popular holiday destination for people taking their holidays at home this year, it still isn't enough to counteract the loss of foreign visitors.