IMF expects UK to grow just 1pc as forecasts cut

Julian Harris
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TH in the UK will be even more sluggish than previously expected in 2013, while the Eurozone’s economic output will shrink again, the International Monetary Fund (IMF) said yesterday.

The lending body slashed its GDP projections for regions throughout the world, predicting that global growth will slow to 3.5 per cent in 2013 – slightly down from its earlier estimate of 3.6 per cent expansion.

Britain’s economy will expand just one per cent this year, the IMF expects, edging down its previous forecast of 1.1 per cent growth.

In its last World Economic Outlook, published last year, the IMF said the Eurozone could expect 0.1 per cent growth in 2013. Yet now it predicts a 0.2 per cent contraction.

“While there are plenty of candidates vying for the dubious honour of being the ‘sick man of Europe’, Europe has got the ‘sick man of the world’ gong in the bag,” commented Jason Conibear of foreign exchange specialists Cambridge Mercantile.

“With Germany’s economy going off the boil again, the bloc's laggards will drag it into contraction for the second year in a row.”

Despite being widely regarded as the Eurozone’s powerhouse economy, German will fare even worse than the UK in 2013, the IMF said.

German GDP will grow by just 0.6 per cent, its economists believe, down 0.3 percentage points from last years’s forecasts.

And the IMF expects France – the Eurozone’s second largest economy – to expand by just 0.3 per cent.

In crisis-struck Italy and Spain, GDP will shrink by one per cent and 1.5 per cent respectively, the IMF said.

Across the pond the situation is thought to be more robust, however.

Despite ongoing strife over the US debt ceiling, the IMF expects the world’s largest economy to grow by two per cent throughout 2013 – down by only 0.1 percentage point since its previous forecast.