Friday, January 20, 2017

IMF upgrades UK’s growth forecast for 2017

The International Monetary Fund (IMF) has upgraded its growth forecast for the United Kingdom (UK) this year, citing a better than expected economic performance since the June referendum.

The IMF noted that economic activity in the the country has “held up better than expected,” prompting the monetary body to revise its 2017 forecast from 1.1 percent to 1.5 percent.

The monetary body’s updated forecast closely mirrors projections made by the Bank of England and the Office for Budget Responsibility, which both see the UK economy edging higher by 1.4 percent this year.

IMF’s growth estimates for the global economy remains unchanged at 3.4 percent in 2017, and 3.6 percent in 2018.

Commenting on the updated projections, a Treasury spokesperson said that the fundamentals of the UK economy are robust, adding that the country was the fastest-growing major advanced economy in 2016, and that the revised figures from the Washington-based fund confirm such assertions.

The latest figures from the Office for National Statistics shows that the country’s GDP grew by 0.6 percent in the third quarter of 2016, while surveys suggest growth of 0.5 percent in the last three months of the year, nudging UK’s full year GDP growth to approximately 2.1 percent.

The World Bank, meanwhile, has downgraded its growth forecast for the UK. It expects the UK economy to grow at a rate of 1.2 percent, down from its previous estimates of 2.1 percent.

The World Bank’s numbers are also broadly supported by the forecasts published by the Organisation for Economic Cooperation and Development, noting that reduced growth prospects and increased volatility, as a direct consequence of the June vote, will mitigate the country’s growth potential in the near term.

Several other countries, including the United States and China, also saw their growth forecasts upgraded. The US economy is projected grow by 2.3 percent this year, slightly up 0.1 percent from a previous forecast of 2.2%. Growth figures for China were likewise updated to 6.5 percent from 6.2 percent.

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