Wednesday

13th Dec 2017

UK economy faring better than expected, says IMF

  • "Domestic demand held up better than expected in the aftermath of the Brexit vote," the IMF says (Photo: Harshil Shah)

The International Monetary Fund has upgraded its economic forecasts for the eurozone and the UK this year, but said British growth would slow down in 2018.

In an update to its biannual World Outlook published on Monday (16 January), the IMF said the eurozone would grow by 1.6 percent in 2017, a 0.1 percentage point increase on the forecasts published in October.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

It expects the eurozone economy to grow at a similar pace in 2018, without revising its previous forecast.

It says the British economy will grow by 1.5 percent this year, 0.4 points more than expected in October, after 1.6 percent growth in 2016.


The IMF notes that "domestic demand held up better than expected in the aftermath of the Brexit vote".

But it has revised its 2018 forecast for the UK down by 0.3 points to 1.4 percent growth.

The Washington-based institution notes that "the outlook for advanced economies has improved for 2017-18". But it highlights "balance sheet weaknesses in parts of the euro area" and says that goods and services output "remains below potential in a number of other advanced economies, notably in the euro area".

Looking at the global conditions around the EU economy, the fund warns of "uncertainty surrounding the policy stance of the incoming US administration and its global ramifications" and of a "possible shift toward inward-looking policy platforms and protectionism".

It also insist that geopolitical risks such as wars, terrorism and "the tragic plight of refugees and migrants in neighbouring countries and in Europe" could have a negative impact on global economic activities.

Looking at different EU countries, the IMF notes that Spain and Germany, along with the UK, had a stronger than-expected performance during the latter part of 2016.



It expects the Germany economy to grow by 1.5 percent in 2017 and 2018 - up 0.1 points compared with the October forecasts - and the Spanish economy to grow by 2.3 and 2.1 percent in 2017 and 2018 - a 0.1 and 0.2 point upward revision.

The fund also revised downward the prospects for Italy. It says the country should grow by 0.7 and 0.8 percent this year and next year. It is 0.2 and 0.3 points less than expected in October.

IMF: Brexit would cause severe damage

The International Monetary Fund warns of the consequences of a British exit from the EU. Brexit campaigners say the fund is politically motivated.

Bitcoin risky but 'limited phenomenon', says EU

The EU is facing calls to regulate bitcoin, the virtual currency whose value has skyrocketed in the past year. Some of its institutions warn about the risks of investing in cryptocurrencies, whilst ECB members ponder regulation.

Commission wants more centralised eurozone by 2019

EU leaders will discuss at their summit next week the commission's proposals, which include a European Monetary Fund and an EU finance minister - but no eurozone budget, as proposed by French president Emmanuel Macron.

Commission wants more centralised eurozone by 2019

EU leaders will discuss at their summit next week the commission's proposals, which include a European Monetary Fund and an EU finance minister - but no eurozone budget, as proposed by French president Emmanuel Macron.

News in Brief

  1. EU bank delays gas pipeline decision
  2. Hungary's leftwing parties join Jobbik in anti-Orban protest
  3. Barnier: EU will not accept UK backtracking on Brexit deal
  4. Puigdemont to return to Catalonia if elected
  5. Commission approves EasyJet partial takeover of Air Berlin
  6. EU medical command centre due next year
  7. Auditors: EU 'green' farm payments fail ecology criteria
  8. Austria gas explosion creates Italian energy 'emergency'

Stakeholders' Highlights

  1. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  2. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  3. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  4. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  5. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  6. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  7. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  8. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  9. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties
  10. EPSUEU Blacklist of Tax Havens Is a Sham
  11. EU2017EERole of Culture in Building Cohesive Societies in Europe
  12. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage

Latest News

  1. Last chance for Poland to return property to its rightful owners
  2. Commission attacks Tusk on 'anti-European' migrant plan
  3. Volkswagen tells EU: we will fail on our recall promise
  4. EU will not start Brexit future talks before March
  5. Bitcoin risky but 'limited phenomenon', says EU
  6. Panama Papers - start of sensible revolution in EU tax affairs?
  7. Lebanon crisis overshadows EU aid for Syrian refugees
  8. New Polish PM brings same old government