Prospects brighter for global economic recovery
The OECD (Organisation for Economic Cooperation and Development) said the world economy is likely to expand by 5.6% in 2021. The figure for the UK is 5.1% followed by 4.7% next year. This significantly brighter outlook reflects the deployment of effective vaccines.
Stimulus aid
There was also an effect from economic stimulus measures in the U.S., in particular the $1.9 trillion package President Biden will introduce.
The report does however suggest a risk of lasting costs from the pandemic in some countries, and that includes the UK.
U.S. upgrade
There is a particularly substantial upgrade for the U.S. national forecast for this year. The report says there are likely to be welcome spill-overs in major U.S. trading partners.
The report suggests that he global economy is now likely to reach pre pandemic levels of economic activity by the middle of 2021. But that does not mean the pandemic related damage will have been reversed by then. Without the health crisis, the economy would have been expected to grow throughout the last year.
Among the developed economies, the largest shortfall on this measure is for Spain, followed by the UK, at more than 4%. Of the G20 major economies only two, the US and Turkey, are predicted to beat that previous projection.
ONS data says UK economy 9% smaller and EU exports dive
January (ONS) – Office for National Statistics figures, released March 11th 2021, have revealed that the UK economy is 9% smaller than it was before the pandemic.
UK exports drop
The ONS, in another report calculated that UK goods exports to the European Union fell 40.7% in January, while imports tumbled 28.8%.
Biggest drop since records began
The figures show the biggest drop since records began in 1997, and are the first since new trading rules between the UK and the EU came into force.
It will take many years to repair the pandemic damage done to global economies, the aftermath of Brexit is making it just that little bit harder for the UK.
Taxes will have to go up, sooner or later!