IMF forecast implies UK recession nearly over!
Simon Ward
Post a Comment
The IMF’s new forecasts show UK GDP declining by 2.8% in 2009 versus an average fall in advanced economies of 2.0%. The UK’s performance is projected to be the worst of the Group of Seven (G7) major economies.
This forecast, however, is more a reflection of recent developments than a view that the UK will underperform going forward. UK GDP and output figures published last week imply that monthly GDP in December was 1.0% below the fourth-quarter level and 2.4% lower than the calendar 2008 average – see here. So the IMF forecast for 2009 implies a further decline in GDP from December of only 0.4%.
The UK is the only G7 country yet to have published fourth-quarter GDP numbers. Performance in other major nations is likely to be similarly dire or even worse, in which case IMF projections may need to be revised down.
After the UK, Japan and Germany are forecast to suffer the largest GDP declines in 2009, of 2.6% and 2.5% respectively, reflecting their exposure to collapsing world trade. Countries that “fixed the roof” in good times – running savings surpluses and avoiding domestic credit / housing booms – are suffering at least as much as deficit offenders in the current global downturn.
View Printer Friendly Version
Email Article to Friend
Reader Comments