• Wednesday, May 29, 2024

Business

IMF raises UK economic growth forecast to 7 per cent

Pedestrians some wearing face masks, walk in the summer sunshine in central London on July 26, 2021. (Photo by Tolga Akmen / AFP) via Getty Images)

By: Shilpa Sharma

THE INTERNATIONAL MONETARY FUND (IMF) has raised forecast for the UK economic growth for this year to seven per cent in line with other major advanced economies.

The latest forecast was 1.7 percentage points higher than the IMF forecast in April.

British economic output dropped almost 10 per cent in 2020, worst in more than 300 years, as it implemented months of curbs on economic and social activity to control the spread of Covid-19.

However, the IMF lowered Britain’s growth forecast for 2022 by 0.3 percentage points to 4.8 per cent.

With the latest update, the IMF’s forecasts for 2021 and 2022 are now closer to those made by the Bank of England in May.

IMF chief economist Gita Gopinath said the upward revision mostly reflected faster growth between February and April, when the country’s economy adapted better to lockdown restrictions than the IMF had assumed.

Chancellor, Rishi Sunak, welcomed the IMF’s revised forecast for the UK and called “the positive signs that the economy is rebounding faster than previously expected”.

He also acknowledged that there were still challenges ahead and said the government would remain focused on protecting and creating as many jobs as possible.

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