Friday

18th Aug 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 and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  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.

Airbnb too 'different' to pay EU tax

US home rental firm said its “model is unique” because most of the money stays in pockets of local people, as France and Germany prepare EU tax crackdown.

EU cautious with German diesel plan

The European Commission welcomed the German carmakers' pledge to update software in diesel cars, but is waiting for details on how emissions will be reduced.

News in Brief

  1. Macedonia sacks top prosecutor over wiretap scandal
  2. ECB concerned stronger euro could derail economic recovery
  3. Mixed Irish reactions to post-Brexit border proposal
  4. European Union returns to 2 percent growth
  5. Russian power most feared in Europe
  6. Ireland continues to refuse €13 billion in back taxes from Apple
  7. UK unemployment lowest since 1975
  8. Europe facing 'explosive cocktail' in its backyard, report warns

Stakeholders' Highlights

  1. European Healthy Lifestyle AllianceDoes Genetics Explain Why So Few of Us Have an Ideal Cardiovascular Health?
  2. EU2017EEFuture-Themed Digital Painting Competition Welcomes Artists - Deadline 31 Aug
  3. ACCABusinesses Must Grip Ethics and Trust in the Digital Age
  4. European Jewish CongressEJC Welcomes European Court of Justice's Decision to Keep Hamas on Terror List
  5. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  6. Centre Maurits CoppietersWe Need Democratic and Transparent Free Trade Agreements Says MEP Jordi Solé
  7. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  8. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  9. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  10. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  11. ACCAAnnounces Belt & Road Research at Shanghai Conference
  12. ECPAFood Waste in the Field Can Double Without Crop Protection. #WithOrWithout #Pesticides