OECD says UK faces being only member of G7 in recession this year

2023-03-18

UK faces being only member of G7 in recession this year as OECD predicts 0.2% fall in GDP – with just Russia hit worse among the G20

OECD has released its latest update on the international economic outlook

The UK faces being the only member of the G7 in recession this year – with only Russia performing worse among the G20.

The latest grim forecasts from the OECD say GDP will fall by 0.2 per cent over 2023. Although that is slightly better than the 0.4 per cent predicted by the international body in November, it is still substantially behind other leading economies.

Germany is second-worst in the G7, which also includes the US, Japan, Canada, France and Italy, with 0.3 per cent growth.

The dire figures also put the UK at the basement of the G20 group, although Russia is out on its own at the bottom with an expected plunge of 2.5 per cent amid the war in Ukraine and international sanctions.

Jeremy Hunt insisted the economy was ‘resilient’ and had outperformed forecasts before. But the findings OECD’s Interim Outlook could renew pressure on the Chancellor to push for growth.

The latest grim forecasts from the OECD say GDP will fall by 0.2 per cent over 2023

The Budget earlier this week had a series of measures to bring people back into the workforce, but was criticised for increasing the burden on businesses and consumers.

Mr Hunt said today: ‘The British economy has proven more resilient than many expected, outperforming many forecasts to be the fastest growing economy in the G7 last year, and is on track to avoid recession.

‘Earlier this week I set out a plan to grow the economy by unleashing business investment and helping more people into work, alongside extending our significant energy bill support to help with rising prices, made possible by our windfall tax on energy profits.’

The Treasury’s OBR watchdog had the same figure for GDP this year.

However, the OECD did upgrade expectations for the UK economy next year, saying it will grow 0.9 per cent rather than the 0.2 per cent previously.

The international body said there were ‘signs of some pick-up’ in global growth, after hammer blows from Covid and the war in Ukraine.

Jeremy Hunt insisted the economy was ‘resilient’ and had outperformed forecasts before

The UK was the best-performing G7 economy last year with GDP growth of 4 per cent. Italy was in second place at 3.9 per cent.

The OECD noted ‘more positive signs have now started to appear’ as food and energy prices fell back from recent highs and predicted growth would improve into next year as inflation continued to recede.

But it warned the improvement was ‘fragile’, highlighting uncertainty about the Ukraine conflict and potential ‘vulnerabilities’ in the global financial system.

Source: Read Full Article