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UK economic growth forecast downgraded to 1.7% by IMF

UK economic growth forecast downgraded to 1.7% by IMF

LONDON: The UK’s growth forecast has been downgraded by the International Monetary Fund (IMF) after weaker-than-expected economic performance. The economy is now expected to grow by 1.7%, down from April’s 2.0% prediction, the organisation said in its latest World Economic Outlook.

UK growth forecasts for next year remain unchanged at 1.5%, the IMF said. It comes in contrast to other major European countries, such as Germany, France and Spain, where growth exceeded expectations, the IMF said. The Treasury said the report shows why securing the “very best deal” on Brexit with the European Union is “vitally important”. Prime Minister Theresa May has previously insisted that no deal is better than a bad deal when Britain quits the bloc. “The growth forecast has also been revised down for the United Kingdom for 2017 on weaker-than-expected activity in the first quarter,” the IMF said. “By contrast, growth projections for 2017 have been revised up for many euro area countries, including France, Germany, Italy, and Spain, where growth for the first quarter of 2017 was generally above expectations.”

The Treasury insisted the fundamentals of the UK economy are strong, with employment at a record high and the deficit down by three quarters since 2009. A spokesman said: “This forecast underscores exactly why our plans to increase productivity and ensure we get the very best deal with the EU are vitally important. “Employment is at a record high and the deficit is down by three quarters, showing that the fundamentals of our economy are strong. “We will continue to deliver greater prosperity and higher living standards for hard working people across the country.”