New growth figures point to 2012/3 deficit 50 per cent bigger than originally projected

The deficit is now set to be8.4 per cent oin 2012/3, missing Osborne's original projection by a full 50 per cent, and one quarter above the original Darling projection

 

The National Institute of Economic and Social Research’s latest growth predictions are certainly grim: the think tank projects that the economy will shrink by 0.1 per cent in 2012. That means, fewer jobs, smaller wages, and a harder economic time for most UK citizens.

However, we knew that these would be difficult times. What was meant to act as consolation was that we would be reducing the deficit and ensuring our long-term financial health.

But, as we know from the correlation between growth and the deficit using the Office for Budget Responsibility’s (OBR) own figures, such a contraction will increase the deficit.

Using George’s Marvellous Deficit Calculator, an economic contraction of 0.1 per cent relates to a deficit of 8.4 per cent in 2012/3 – missing Osborne’s initial projection  of 5.5 per cent – half as much again.

It is around one quarter larger than 6.6 per cent deficit projected under the Darling plan by the OBR.

And as Will Straw and Guido Fawkes have pointed out this, he can’t blame the poor performance on the Eurozone crisis as the trade deficit with the continent continues to shrink.

“Contractionary Fiscal Expansion” isn’t working. What we have, some people might say unsuprisingly, is “contractionary fiscal contraction”. The game is up, and it is time for the government to put the economy before its pride and admitted it is so.

See also:

Positive trade figures undermine Osborne’s claim that Eurozone is to blame for negative growthWill Straw, February 9th 2012

Economic Update – February 2012: Double dippedTony Dolphin, February 7th 2012

US grew almost twice as fast as UK in 2011Will Straw, January 27th 2012

The double-dip beginsTony Dolphin, January 25th 2012

Hopes of an export and manufacturing-led recovery recedeTony Dolphin, August 9th 2011

17 Responses to “New growth figures point to 2012/3 deficit 50 per cent bigger than originally projected”

  1. Patron Press - #P2

    #UK : New growth figures point to 2012/3 deficit 50 per cent bigger than originally projected //t.co/26E1r7ED

  2. Pucci D

    New growth figures point to 2012/3 deficit 50 per cent bigger than originally projected: //t.co/80wfUhXs writes @danielelton

  3. William Bain

    RT @leftfootfwd: New growth figures point to 2012/3 deficit 50 per cent bigger than originally projected //t.co/uDjErA2J

  4. Brian Moylan

    RT @leftfootfwd: New growth figures point to 2012/3 deficit 50 per cent bigger than originally projected: //t.co/GEFKO1gU #ukpolitics

  5. Pulp Ark

    New growth figures point to 2012/3 deficit 50 per… //t.co/7e3AhAac #Sustainable_Economy #cuts #deficit #Growth #muslim #tcot #sioa

  6. Political Planet

    New growth figures point to 2012/3 deficit 50 per cent bigger than originally projected: The deficit is now set … //t.co/6TIdohgy

  7. riendja

    Aibó RT @PatronPress: #UK : New growth figures point to 2012/3 deficit 50 per cent bigger than originally projected //t.co/xEQGAHQv

  8. leftlinks

    Left Foot Forward – New growth figures point to 2012/3 deficit 50 per cent bigger than originally… //t.co/4c01h3j6

  9. Selohesra

    What is the point of referencing the Darling Plan projections when we all know that the world is a different place to the one he assumed. Who knows what the deficit would now be had Labour got re-elected and been allowed to recklessly spend too far and too fast

  10. BevR

    New growth figures point to 2012/3 deficit 50 per cent bigger than originally //t.co/AH898VBp #WRB #SPARTACUSREPORT #UNUM #ATOS #NHS

  11. Yrotitna

    New growth figures point to 2012/3 deficit 50 per cent bigger than originally projected: //t.co/80wfUhXs writes @danielelton

  12. Newsbot9

    Why, it’s almost like you’re ducking responsibility for backing a disastrous plan which has crushed the UK economy again. And copy/pasting nonsense is still just that.

  13. Mr. Sensible

    What will it take for them to change course on the deficit?

  14. Selohesra

    Keep taking the tablets Leon!

  15. Newsbot9

    Of course, anyone who disagrees with your far-right corporatist ideology must be mentally ill. Typical social darwinistic nonsense.

    So sorry I think people are more important than legal fictions.

  16. CBI carry on tradition of alarmingly optimistic growth forecasts | Left Foot Forward

    […] the CBI’s prediction and that of NIESR, who expect a contraction of 0.1 per cent as we reported on Thursday, is quite […]

  17. Britain is the sick man of the G7 - and no-one's to blame but ourselves | Left Foot Forward

    […] New growth figures point to 2012/3 deficit 50 per cent bigger than originally projected – Daniel Elton, February 9th […]

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