British Economy Forecast to See Fall in GDP

Wednesday, 19th December 2018

A stall in Britain’s economy will see the UK fall in the international rankings next year, falling behind India and France, if PwC’s analysis is correct. The firm conducted its annual analysis of global trends, and showed that India’s elevation to fifth place could be permanent, as the country, which has a population of 1.3 billion, has enjoyed a consistent growth rate of 7.6 percent over the last five to six years.

France could benefit in the short term, as the rising value of the Euro has boosted the company. However, it could see its value fall behind the UK again over the next few years, as GDP growth is waning, and much of the UK’s struggles are coming from the uncertainty surrounding Brexit.

India is the fastest growing out of all of the world’s large economies. It has an enormous population, and favourable demographics. It is starting from a low GDP per head, and this puts it in a strong position to catch up. Germany, Italy and Spain are seeing a slowdown in their GDP growth, as are the US, China and Japan which are currently the three largest economies. Much of this can be attributed to the aging populations in those countries. Fiscal stimulus from Trump is likely to fade soon in the US, and the Federal Reserve’s plans to increase interest rates could dampen consumer spending.

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