UK economy defies forecasts to outstrip Germany as EU giant falls into recession

UK economy defies forecasts to outstrip Germany as EU giant falls into recession

June 10, 2023

The UK economy will outstrip Germany’s in 2023, new official figures have shown. The Organisation for Economic Co-operation and Development (OECD) released improved British growth figures last week predicting British GDP will rise by 0.3 percent this year. The data also shows that, by next year, UK growth could match the G7’s top performer.

The OECD’s June economic outlook shows that Germany has fallen into a recession, with zero percent predicted growth for 2023 to 2024.

The prediction means that the UK’s 0.3 percent places it above the EU giant but joint-fourth from the bottom of the world’s major economies.

South Africa has the same predicted growth rate, with Germany third from the bottom and Russia and Argentina second and last in recession with -1.5 percent and -1.6 percent contraction.

The latest figures have slightly upgraded the UK’s previous forecast of 0.2 percent in March this year.

And the UK’s growth could rival the US by next year, with the OECD’s new figures showing the country is on track to meet the G7 leader.

The US is top among G7 members with 1.6 percent predicted growth, and by next year, the OECD predicts that the UK will rise to meet the nation.

While growth is comparatively low in 2023, the organisation envisions a 0.7 percent increase to one percent in 2024.

The prediction places the UK neck-and-neck with the US, which is expected to sink from 1.6 percent to one percent.

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Within the G7 as a whole, this would make the UK’s growth the joint fourth largest, with Italy also expected to see one percent next year.

Germany is only expected to decline further, with the OECD anticipating contraction to -0.4 percent.

The figures are moderately encouraging for the UK and its fellow G7 members, but the group is still far behind the world’s top performers.

India, China and Indonesia came first, second and third with predicted growth of six percent, 5.4 percent and 4.7 percent respectively.

By 2024, all but China – where growth will fall to 5.1 percent – are anticipating an improvement.

India’s growth forecast increases to seven percent, and Indonesia’s to 5.1 percent.

Clare Lombardelli, the OECD’s chief economist, said the recent figures mark a turning point for the world’s major economies.

She said: “The global economy is turning a corner but faces a long road ahead to attain strong and sustainable growth.”

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