UK economy will not experience recession and will now grow faster than Germany, IMF claims

The International Monetary Fund (IMF) has stated that it does not expect the United Kingdom to enter a recession this year. It added in an update to prior predictions, “Buoyed by resilient demand in the context of declining energy prices, the UK economy is expected to avoid recession and maintain positive growth in 2023.”

However, the outlook for growth remains “subdued,” with growth of 0.4% expected this year.

According to the IMF, the improvement indicates “higher-than-expected resilience” in both demand and supply, citing increased confidence in reduced post-Brexit uncertainties and dropping energy costs.

Chancellor Jeremy Hunt said the IMF report shows a “big upgrade” for the country’s growth prospects and credits the Government’s “action to restore stability and tame inflation”.

He said: “It praises our childcare reforms, the Windsor Framework and business investment incentives.

“If we stick to the plan, the IMF confirms our long-term growth prospects are stronger than in Germany, France and Italy – but the job is not done yet.”

“Growth is projected to rise gradually to 1% in 2024, as disinflation softens the hit to real incomes, and to average around 2% in 2025 and 2026, owing primarily to a projected easing in monetary and financial conditions,” IMF stated.

However, the analysis supports the UK filling skills shortages with immigrants, amidst debate in Westminster regarding government strategy ahead of the release of new net migration data this week.

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