IMF Upgrades UK Growth Forecast
17 April 2012 17:00 - Victoria Wedderburn

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IMF Upgrades UK Growth Forecast

The International Monetary Fund has raised its growth forecast for the UK this year.  In its World Economic Outlook, the IMF expects Britain to grow by 0.8% in 2012. The UK’s improved prospects reflected an improved outlook for the global economy as a whole. The IMF said there had been a “reacceleration of activity” and that “high frequency indicators point to stronger growth.” They added, “Growth in the UK, where the financial sector was hit hard by the global crisis, will be weak in early 2012, before recovering.”

The IMF raised its global growth forecast, predicting the world economy will expand 3.5% this year and 4.1% in 2013. This is an improvement on forecasts made in January that predicted 3.3% for 2012 and 4% for 2013. The report reflects the IMF’s view that the Eurozone was stabilizing but was still at risk of facing an economic downturn. The euro area economy is forecasted to decline by 0.3% in 2012 which is still an improvement from the 0.5% seen in a previous IMF forecast. In the summary of the report, the IMF said, “Improved activity in the United States during the second half on 2011 and better policies in the euro area in response to its deepening economic crisis have reduced the threat of a sharp global slowdown.”