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IMF upgrades UK’s growth forecast

IMF upgrades UK’s growth forecast
06.04.2021
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The global recession would have been three times deeper had governments not stepped in to rescue their economies, the International Monetary Fund has said, in its most positive outlook for the global economy since the onset of the pandemic.

In its latest update on the state of the global economy, the Fund upgraded its outlook for growth in a range of economies, including the UK, the US and much of Europe, and suggested that advanced economies may be able to avoid much of the long-term damage some economists had expected from the Covid-19 crisis.

It said it expected UK growth to be over 5% this year and next, pointing to the successful vaccine rollout.

Britain will, according to the Fund’s forecasts, have the strongest growth in the group of seven industrialised economies next year, the depth of the recession in 2020 means it will be the second last of them to regain its pre-Covid level of gross domestic product.

The forecasts came as the IMF begins its spring meetings, which are again being held virtually from Washington DC.

The Fund said that the global economy will grow by 6% in 2021. This is the strongest annual growth rate since the early 1970s, but follows a 3.3% fall in 2020 – which was itself the biggest fall in output since at least the early 1950s.

The Fund said that the UK economy will grow by 5.3% and 5.1% this year and next. Both of these represent upgrades from its previous forecast update in January.

Responding to the IMF report, UK Chancellor Rishi Sunak said: “Our package of support continues to be one of the largest and most comprehensive in the world, with more than £350bn spent on the response to COVID-19 so far.

“This period has undoubtedly been one of the most challenging we’ve ever faced, but through our Plan for Jobs we have focused on protecting and creating as many jobs as possible throughout the crisis.

“As we progress with the UK’s roadmap and the vaccine rollout, I believe there are reasons for optimism, and we are paving the way for brighter times ahead.

“We will continue to work closely with our G7 and G20 partners to help ensure that no country is left behind in the global economic recovery from the pandemic.”

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