Rivals leaving Britain behind in ‘global race’ for recovery
Analysis of IMF data claims UK growth will trail most other major economies by the end of Coalition’s term
Britain is a leaden-footed laggard in Prime Minister David Cameron’s “global race”, according to an analysis of economic figures and forecasts by the International Monetary Fund (IMF).
Based on the growth in per capita GDP, at the end of the Coalition’s term in 2015 the UK will have grown by just 1.2 per cent.
That leaves it marooned in 25th place among the 33 major economies for which the IMF provides forecasts. China is not included.
The figures use real data for the early part of the Coalition’s term, combined with forecasts for later years.
They give some context to the recent economic data suggesting that UK plc is finally showing signs of economic revival. It would have to dramatically pick up the pace over the next two to three years to significantly outpace the IMF’s forecasts.
Analysis of the IMF’s numbers by the TUC shows that even debt-ridden France, buffeted by the eurozone crisis, will have outperformed the UK with a 1.6 per cent improvement in per capita GDP during the Coalition’s five-year term.
Estonia easily sets the pace with a predicted rise of 22.8 per cent during the period, but the small Baltic state endured a brutal recession and is now benefiting from a rapid bounce back. Several larger Asian economies from the economically dynamic south-eastern part of the continent follow hot on its heels, headed by Taiwan with predicted growth of 15.5 per cent over the five years, South Korea (14.5 per cent) and Hong Kong (14.3 per cent).
Resource-rich Australia comes in sixth with a climb of 9.2 per cent followed by the US (8.5 per cent).
Unsurprisingly, Germany sets the pace in Europe with growth of 8 per cent expected, bettered only by the Slovak Republic (12.5 per cent).
But Sweden (7.5 per cent), Malta (6.8 per cent), Austria (5.6 per cent) and Norway (5.2 per cent) all trounce the UK with rises above 5 per cent. Switzerland, the Czech Republic, Finland and Denmark are expanding at a much-slower rate than that, but they still outpace the UK.
Ireland, following its banking crisis, bailout, and brutal economic medicine, is expected to turn in expansion of 6 per cent.
However, the UK performs notably better than the Netherlands, while crisis-racked Spain, Italy and Portugal, are all in negative territory, propped up by Greece with a 12.8 per cent tumble.
But the TUC warns that the UK’s limited growth may not benefit ordinary people much.
Said a spokesman: “This is GDP per capita and it is a mean average rather than a median. During the 2003 to 2008 period when GDP grew 11 per cent, median wages stagnated so even if GDP is growing those in the middle and the low aren’t benefiting.”
TUC general secretary Frances O’Grady said: “The Government has been very quick to hail fragile growth as proof that the UK is out of intensive care and ‘on the mend’. However, these figures show that while other countries are powering ahead, the British economy remains firmly stuck in the slow lane. As much as George Osborne would like people to believe that austerity has helped keep Britain competitive, it has succeeded only in squeezing living standards and putting the brakes on our economic recovery. Without a fresh approach we will continue to trail our economic rivals.”
Ms O’Grady urged the Chancellor to “follow the example of countries like the US whose ambitious programme of investment in jobs helped to turn its economy around”.
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