Positive predictions are coming true increasingly rare these days. First, the risk of a US debt default was eliminated. Then it turned out that Europe managed to avoid a recession. Now there is every chance that the UK economy will stabilize. At the same time, early forecasts suggested just the opposite.
The International Monetary Fund was one of the first to review its outlook for Britain. Now experts are confident that the country will avoid entering a recession and "maintain positive growth" this year. As stated on the Fund’s official website, gross domestic product is likely to increase by 0.4% in 2023, which is 0.7 percentage points above the previous projection. Back in April, the IMF expected the UK economy to shrink by 0.3% by the end of the year, making it the worst performer among the world's major economies.
According to the Fund, the improved outlook reflected the unexpected resilience of demand, driven in part by faster wage growth and higher government spending. Demand was also supported by lower energy prices and a global supply chain recovery.
At the same time, Britain’s growth potential remains subdued. Its economic activity has slowed considerably compared to last year, with inflation remaining "stubbornly high" at 10.1%. Nevertheless, it is forecast to ease to around 5% by the end of this year.
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