IMF: Next year, the United Kingdom will have the slowest growth rate of the G7 richest economies

July 29, 2022

According to the International Monetary Fund, the United Kingdom will have the slowest growth of the G7 richest economies next year.

It predicts that UK growth will fall to 0.5 percent in 2023, much lower than its April forecast of 1.2 percent.

According to the IMF, the global economy shrank for the first time since 2020, owing to the Ukraine war and Covid-19.

With growth slowing in the UK, US, China, and Europe, the world “may soon be teetering on the brink of a global recession,” according to the report.

The IMF has reduced its global growth forecast for 2022 to 3.2 percent and warned that the slowdown could be even worse.

It blamed fast-rising prices for much of the slowdown, with households and businesses squeezed by a combination of higher prices and higher borrowing costs as policymakers raised interest rates to combat inflation.

According to the IMF, the global economy contracted in the three months to July, the first drop since the pandemic began.

The likelihood of a recession in the G7 economies – Canada, France, Germany, Italy, Japan, the United States, and the United Kingdom – is now around 15%, nearly four times higher than usual.

While UK growth is expected to remain relatively strong this year, Mr Gourinchas predicts that unusually high inflation – faster than in Europe or the US – will take its toll in 2023.

Source: BBC
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