Behind today's headlines on the IMF downgrading Britain's expected growth levels, lie reams of data and analysis about the state of the world economy.
Behind today’s headlines on the IMF downgrading Britain’s expected growth levels, lie reams of data and analysis about the state of the world economy. Perhaps most depressing of all is the map below putting Britain’s predicament in a global context.
With one or two exceptions, growth below 2 per cent is isolated to Europe, Britain’s major trading partner. This does not bode well given that Britain’s recovery is predicated on export-led growth. Alongside Britain, slow or negative growth is expected in Portugal, Ireland, Greece, and Spain (the so-called PIGS) plus the Netherlands, France, Italy, Belgium, Cyprus and the Czech Republic.
The detailed projections for Europe (Table 2.2) show that Britain is expected to have the highest inflation of any EU country aside from Estonia. And while unemployment is below the EU average, it is expected to fall by just 0.1 percentage point over two years. Of countries with unemployment above 5 per cent (the ‘full employment’ rate), only Greece, Portugal, Slovenia and Malta have a worse trend.
And all this assumes that the IMF have their numbers right this time. Like the Office of Budget Responsibility, they have had to downgrade their projections several times already. The British Chambers of Commerce recently downgraded their growth projections from 1.7% to 1.4%. With today’s dire economics statistcs, how long before the IMF have to reconsider their support of what they call the government’s “necessary front-loaded fiscal consolidation”.Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.