IMF predicts growth in UK economy

Global economic health tracker, the International Monetary fund (IMF), has forecast an increase in the UK economy according to its most recent report.

The IMF calculates that Britain’s economy will grow by 2.4 percent in 2014, 2.2 percent in 2015, faster than any other European economy.

“Global growth is expected to increase in 2014 after having been stuck in a low gear in 2013,” the IMF reported on Tuesday.

The Treasury said the new UK forecast was further evidence that the government’s economic plan was working, the BBC reported.

The IMF also said in their report that it expects global growth to increase from 3 percent in 2013 to 3.7 percent in 2014 and 3.9 percent in 2015.

“The basic reason behind the stronger recovery is that the brakes to the recovery are progressively being loosened,” said Olivier Blanchard, the IMF’s chief economist and director of its Research Department. “The drag from fiscal consolidation is diminishing. The financial system is slowly healing.”

Olivier Blanchard, the IMF’s chief economist. Photo: IMF on Flickr (CC BY-NC-ND 2.0)

The US economy is predicted to increase by 2.8 percent in 2014, a 0.2 percent boost on the IMF’s October prediction, the Chinese economy is set to increase to 7.5 percent, and it expects the entire euro area to grow by 1 percent:

“The euro area is turning a corner from recession to recovery,” the IMF said. Although, it added that countries such as Greece, Spain, Cyprus, Italy and Portugal, that had suffered considerable “financial stress” of late, would experience a slower economic pick up.

Despite such bright predictions, the IMF urged governments in leading economies not to retire measures to cultivate growth because “strengthening global growth does not mean that the global economy is out of the woods”.