The UK will be the only member of the G7 in recession this year as the OECD forecasts a 0.2% drop in GDP – with only Russia even worse hit among the G20
The UK is the only member of the G7 to be in recession this year – only Russia is underperforming among the G20.
According to the latest gloomy forecasts from the OECD, GDP will fall by 0.2 percent in 2023. While that’s slightly better than the 0.4 percent the international body predicted in November, it’s still significantly behind other leading economies.
Germany is second in the G7, which also includes the US, Japan, Canada, France and Italy, with growth of 0.3 percent.
The dismal numbers also put the UK in the basement of the G20 group, though Russia is on its own with a projected 2.5 percent drop amid the war in Ukraine and international sanctions.
Jeremy Hunt insisted the economy was “resilient” and had outperformed earlier than forecast. But the findings of the OECD’s interim outlook could renew pressure on the chancellor to push for growth.
OECD’s latest gloomy forecast predicts GDP to fall 0.2 percent in 2023
The budget earlier this week contained a series of measures to get people back to work, but was criticized for increasing the burden on businesses and consumers.
Mr Hunt said today: ‘The UK economy has proved more resilient than many expected, outperforming many forecasts to be the fastest growing economy in the G7 last year, and on track to avoid a recession.
“Earlier this week I laid out a plan to grow the economy by unleashing business investment and putting more people into work, in addition to expanding our significant support for utility bills to help with rising prices enabled by our windfall tax on energy gains.’
The Treasury’s OBR watchdog had the same figure for GDP this year.
However, the OECD has revised its expectations for the UK economy next year, saying it will grow by 0.9 percent from the 0.2 percent previously.
The international body said there were “signs of some uptick” in global growth, following hammer blows from Covid and the war in Ukraine.
Jeremy Hunt insisted the economy was “resilient” and had outperformed earlier than forecast
The UK was the best performing G7 economy last year with a GDP growth of 4 percent. Italy is in second place with 3.9 percent.
The OECD noted that “more positive signs are now beginning to emerge” as food and energy prices fell from recent highs and forecast growth next year would improve as inflation eases further.
But it warned that the improvement was “fragile,” highlighting uncertainty over the conflict in Ukraine and possible “vulnerabilities” in the global financial system.