The UK will be the fastest growing advanced economy in 2022, the International Monetary Fund (IMF) is forecasting.
The IMF upgraded its growth forecasts after the success of the UK’s vaccination programme became apparent, with millions receiving the jab to protect them against Covid-19. The IMF has predicted faster post-pandemic growth for the UK compared to the EU and US, the Telegraph reports.
Strongest since 1988
UK growth will reach 5.3% in 2021 and 5.1% next year as it catches up with other nations following one of the biggest GDP hits from the pandemic. This would mark the UK’s strongest growth surge since 1988, although output is not expected to return to pre-virus levels until 2022.
After a predicted 6.4% growth this year, US growth will be 3.5% in 2022, according to US News.
The eurozone meanwhile will see growth of 4.4% in 2021, helped by a faster recovery in Italy, and will regain its pre-pandemic economic size more quickly than Britain. However, growth will be slip to 3.8% in 2022, reports Pound Sterling Live.
The IMF predictions confirm hopeful forecasts from the UK’s Office for Budget Responsibility that UK GDP growth would hit 4% in 2021 before surging to 7.3% next year, according to City AM. This would be the highest one-year figure since 1941.
It comes after the economy contracted by just under 10% in 2020.
The FT reports the IMF saying that developed nations will face little lingering economic damage from the pandemic due to their willingness to sharply increase spending and borrowing.
Smaller economies will face longer term impacts, the international body says.
On upgrading growth expectations from the beginning of the year for almost all countries globally, the IMF said it expected two years of rapid growth and that the outcomes for economies would not mirror the aftermath of the 2008-9 financial crash.
By 2024, advanced economies will produce about 1% less output than their pre-pandemic growth path. After 2008-9 they suffered a gap of more than 10%.