IMF slashes UK growth, but still best in Europe

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Just a day after the Chancellor’s speech at the Conservative conference the International Monetary Fund (IMF) has slashed the UK growth forecast for both this year and last year, leading Labour to claim that George Osbourne is clinging to a failing plan for economic recovery.

Growth this year is now predicted by the IMF to shrink 0.4%, down from the 0.2% growth predicted six months ago and the forecast for 2013 is also down from 1.4% to 1.1%. Combined the revised forecasts for the UK economy represents the highest downgrade for any developed country in the world.

However it’s not all bad news, the 1.1% growth forecast for 2013 is still the highest in the European area beating Germany (0.9% growth), France (0.4% growth) with Italy and Spain being forecast shrinking economies (-0.7 and -1.3% respectively).

The good news for online traders is that the Internet doesn’t seem to be suffering in the same way as the economy at large. It’s unlikely that the UK government have visibility of how many independent businesses are prospering on the Internet, let alone the IMF. eBay are indicating that the UK is their best performing territory for growth and certainly all the indications are the cross border trade shows no time of slowing down any time soon.

Should you be worried about the IMF predictions if your business is in rude health and turning in decent profits? Probably, but is there anything you can do about it? Probably not. Whilst the IMF growth forecasts around the world have generally been revised downwards and austerity measures far from cutting deficits are according to some harming the economy, those how are trading online seem to have a niche which so far the recession hasn’t impacted as harshly as other industries.

One Response

  1. Now, you are entirely correct here Chris. But there are different ways to read the numbers.

    Indeed, the current IMF prediction for 2013 do indeed show the UK with the best prospects of those countries represented. Yes, in 2013 0.9% growth in German is trumped by 1.1% UK growth.

    BUT. Germany is predicted to grow 0.9% this year 2012 too. Whereas the UK economy, has contracted. So, over two years, Germany is stronger.

    Indeed, look at 2010 and 2011: both years saw strong growth in Germany, better than the UK.

    We may not be a basketcase but I’d rather have some of those German growth numbers in the UK.


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