Has the economy grown by just 0.1% in 9 months?
The highly respected National Institute for Economic and Social Research has just released its forecast of GDP growth for the 2nd quarter.
Most observers have revised down their forecast for Q2 growth to 0.3% in recent weeks, today’s evidence suggests it could be even lower.
NIESR are now forecasting growth of just 0.1%.
That would mean growth of 0.1% in 9 months – an absolutely disastrous economic performance.
The chart below (from NIESR) maps the UK’s economic performance over previous recessions, as can be seen the closest parallel to this anemic recovery is the Great Depression.
There is no way the deficit can be reduced if the economy is growing just 0.1% in 9 months.
If this is true, let’s not forget that the UK population grew by about 0.7% during the same period, meaning that per capita GDP will have actually declined.
What would be surprising is if anyone is surprised by this.
This is mental.
We need more demand.
What do you think of Scott Sumner’s argument that the UK’s supply side is fucked and also contributing to slow growth as much as weak demand is?
Is this the kind of thing you mean?
The original Economist article credited Sweden’s success to the ‘left-wing’ philosophies of strong manufacturing sector and regulated (rather than deregulated) financial services. Naturally, both Sumner & the Economist tried to gloss over this.
[...] growth prospects are tanking by Duncan Weldon July 8, 2011 at 4:39 pm Yesterday’s news that NIESR is forecasting growth of only 0.1% in the second quarter reminds us of quite how bad [...]