The IMF no longer expects the UK to enter a recession in 2023

The UK economy, Europe’s second-largest, will avoid falling into recession this year, according to new forecasts from the International Monetary Fund, which now expects GDP to expand by 0.4%, compared to a contraction of 0. . 3% was previously expected.

“Led by A Elastic demand In the context of Low energy pricesthe UK economy is expected Avoid recession and maintain positive growth in 2023“Concluded experts International Monetary Fund At the end of his mission in the country to prepare the annual report “Article 4”.

In this way, IMF experts expect this to happen Growth is expected to slow to 0.4% in 2023slowed by the tighter monetary and fiscal policies needed to stop inflation, which means an improvement by seven-tenths of the previous forecast that Expectations of a 0.3% contraction.

In this regard, they point out that: Change prediction reflects Greater flexibility than expected Whether on demand, including wage increases to keep pace with inflation, Less contractionary fiscal position in 2023 and increased confidenceas well as in the show before Reducing energy costs and consolidating global supply chains.

Looking to 2024, the IMF expects growth in the British economy to gradually increase as the impact of inflation on real income eases, with Expand by 1% in 2024 And a Medium growth From around 2% in 2025 and 2026This is mainly due to the expected easing in monetary and financial conditions.

Likewise, it is expected that Low energy prices and a growing economic recession Significantly reduce Economic inflation About the 5% Annual end 2023; And Less than the 2% target by mid-2025.

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In this sense, it is the International Monetary Fund A greater monetary adjustment is necessaryWhich confirms that interest rates may need to remain high for longer to reduce inflation more safely.

“The Bank of England must continue to focus on… Basic measures of inflationsuch as growth wages And inflation Services“, says the foundation.

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