UK’s economic recovery upgraded by IMF
The UK’s economy is forecast to have the joint fastest growth in the G7 in 2021, but was the worst hit of any G7 country last year.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The UK’s economy will grow faster than expected this year as the country bounces back from the devastation of Covid-19, according to a new report.
The International Monetary Fund (IMF) said it expects UK economic output to grow by 7% this year.
It is a large increase from the 5.3% growth that the body’s economists had predicted in April.
“There are positive signs that our economy is rebounding faster than initially expected, with the IMF forecasting the UK to have the joint highest growth rate in 2021 among the G7 economies,” said Chancellor Rishi Sunak.
We still face challenges ahead as a result of the impact of the pandemic, which is why we remain focused on protecting and creating as many jobs as possible through our Plan for Jobs
But the UK’s economic growth this year is likely to be in part because it had so far to bounce back from last year’s fall.
Of all the G7 nations, the UK was the worst hit in 2020, with output dipping 9.8%.
This year’s 7% growth puts the UK neck and neck with the US, but the American economy merely shrank by 3.5% last year, suffering far less than Britain.
Economists also downgraded their growth predictions for next year by 0.3% to 4.8%.
“We still face challenges ahead as a result of the impact of the pandemic, which is why we remain focused on protecting and creating as many jobs as possible through our Plan for Jobs,” Mr Sunak said.
The IMF’s World Economic Outlook also highlighted a widening gap between richer and poorer countries as they look to recover from the pandemic.
“Growth prospects for advanced economies this year have improved by 0.5 percentage points, but this is offset exactly by a downward revision for emerging market and developing economies driven by a significant downgrade for emerging Asia ” said Gita Gopinath, the body’s chief economist.
Advanced economies are also expected to see a stronger recovery next year, she added.
The estimates highlight global inequality, not least as nearly 40% of people in advanced economies have been fully vaccinated, compared with just 11% in emerging markets and a “tiny fraction” in low-income developing countries.
Meanwhile, per capita income has dipped just 2.8% in advanced economies, compared with 6.3% for emerging market and developing economies, excluding China according to IMF estimates.