The IMF predicts ups and downs for the economies of UK and Spain

THE International Monetary Fund (IMF) predicted that the UK would be one of the world’s worst-performing major economies this year.

Popularly known as the G20, these include Russia which is currently hit by sanctions following the Ukraine invasion.

The IMF expects the UK economy to shrink by 0.3 per cent in 2023 and grow by 1 per cent in 2024, according to the World Economic Outlook report presented on Tuesday in Washington.

The IMF had already forecast that the UK would experience a downturn in 2023, descending to the bottom of the G7 group who are regarded as the world’s seven most advanced economies.  The UK topped the group, which dominates global trade and the international financial system, during the pandemic recovery in 2022.

Despite the sobering outlook for UK economy, this latest prediction is rather better than the IMF’s January prediction of a 0.6 per cent contraction.

Meanwhile the IMF raised Spain’s 2023 growth forecast by four tenths of a percentage point to 1.5 per cent but lowered next year’s prediction by another four tenths, to 2 per cent.

This year’s improved forecast matches those of other organisations, especially after Spain’s strong 2022’s strong 5.5 per cent growth. Two months ago the Organisation for Economic Co-operation and Development (OECD) raised its 2023 forecast to 1.7 per cent, while the Bank of Spain upgraded its own from 1.3 per cent to 1.6 per cent.

Despite these reasonably encouraging figures, they fall short of the Spanish government’s overestimate of a predicted 2.1 per cent growth announced in its Budget.

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