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IMF raises its growth forecast for UK economy after 2020 crash

07 April 2021 00:22 (UTC +04:00)

The International Monetary Fund raised its forecast for British economic growth, which is set to outpace the euro zone this year after its slump in 2020 but is unlikely to regain its pre-pandemic size until some time in 2022, APA reports citing Reuters.

The IMF said Britain’s economy would grow by 5.3% in 2021, up from a previous forecast of 4.5% it made in January.

Britain has suffered Europe’s highest COVID-19 death toll and its economy shrank by almost 10% last year, the worst performance among the region’s big economies except for Spain.

But it has moved quickly with its vaccination programme. Almost half the total population of the United Kingdom has had a first jab compared with less than 15% in Germany and France.

The IMF forecasts published on Tuesday predicted growth of 4.4% for the euro zone in 2021 and 3.6% for Germany, while France was expected to show a 5.8% expansion.

However, the IMF forecasts do not take into account new lockdown measures announced by France and other countries in continental Europe in recent weeks.

Britain is in the process of easing its third lockdown which began in January.

Both Britain and the euro zone will take longer to recover from the economic hit from COVID than the United States or Japan, which are both on track to return to pre-crisis levels of output this year, the IMF said.

The 0.8 percentage-point upgrade for the U.K. economy was stronger than increases of 0.1 and 0.3 percentage points for Germany and France respectively, but less than a 1.2 percentage-point improvement for struggling Italy.

For 2022, the IMF raised its forecast to British economic growth slightly to 5.1% which would be the strongest expansion among Europe’s big economies next year, according to the Fund.