The UK economy will grow less than expected this year – with the International Monetary Fund warning the country will remain the second-worst performer in the Group of Seven.
Newly revised forecasts show UK gross domestic product (GDP) will grow by just 0.5% in 2024, down slightly from January’s forecast, compared with global growth of 3.2%.
However, UK GDP is expected to grow by 1.5% in 2025, making it the third-best performer among G7 countries as households recover after a prolonged cost-of-living crisis.
According to the International Monetary Fund, inflation in the British economy will remain around 2.5% for the rest of this year, but will fall back towards the Bank of England’s 2% target next year.
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In terms of output per capita, GDP for the UK population is flat, with no growth at all in 2024 and growth of 1.1% in 2025.
By adjusting for the UK’s growing population, the indicator provides a better understanding of individuals’ living standards and economic feelings Record legal immigration flow.
The International Monetary Fund said the global economy has been “very resilient” over the past two years, but escalating conflicts in the Middle East could push up global food and energy prices.
“Despite many pessimistic forecasts, the world has avoided recession, with banking systems proving largely resilient and major emerging market economies not suffering,” said Pierre-Olivier Gurinchas, Research Director of the International Monetary Fund. Sudden pause.”
The International Monetary Fund believes that if food, energy and transport prices rise, low-income countries will be hit harder.
While negative risks include a slow recovery in China’s troubled real estate sector, economists believe the outlook could improve if elections around the world lead to tax cuts and a short-term boost to economic activity.
Image: AP
Overall, global output is expected to grow 3.2% this year, up 0.1 percentage point from the previous report in January.
Both the Conservative government and the Labor opposition have pinned their success on economic growth.
Chancellor Rishi Sunak has made economic growth one of his mandates Five key priorities Early 2023 – But UK Entering a recession end of last year.
Labor hopes more economic growth will bring in more tax revenue and generate funds to fund increased spending on public services.
It adopted the same borrowing rules as the Conservatives and said it would not increase debt.
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A spokesman for the Treasury said: “Forecasts for medium-term growth are optimistic, but like all other countries, short-term growth in the UK has been affected by rising interest rates, with Germany, France and Italy all experiencing steeper downgrades than the UK. .U.K.
“Today’s report shows that we are winning the battle against high inflation, with the International Monetary Fund forecasting that inflation will fall much faster than previously expected.
“With inflation falling, wages rising and the economy turning an inflection point, we have been able to lower taxes for 29 million people as part of our plan to reward work and grow the economy.”
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