Connect with us

Hi, what are you looking for?

World News

Economy will take two years to bounce back, warns think tank

The economy will take another two years to recover from the pandemic, a leading think tank has warned.

The National Institute of Economic and Social Research said that GDP would expand by only 3.4 per cent in 2021, down from an earlier forecast of 5.9 per cent. It blamed “uncertainty about the path of the virus and the effectiveness of vaccines against strains.”

It struck a more cautious tone than other forecasters, including the Bank of England. Last week, the Bank pencilled in annual growth of 5 per cent and said that the economy would be back to its pre-pandemic size by early next year.

Hande Kucuk, a deputy director at the institute, said: “Despite the rollout of vaccines, Covid-19 will have long-lasting economic effects.” She added that by 2025 the economy would still be about 6 per cent lower than it would have been had Covid-19 never hit.

This would be the result of “lower consumption caused by higher unemployment, weaker business investment due to stressed balance sheets and uncertainty during the pandemic and the adoption of a trade and co-operation agreement with the EU which imposes more barriers to trade than before”.

The institute said that people would hold on to their savings because of fears about the economic outlook. Unemployment would rise as the job retention scheme ends. The jobless rate is expected to hit 7.5 per cent, or 2.5 million.

Forecast annual growth of 3.4 per cent this year is broadly in line with the United States, at 3.6 per cent, and the European Union, at 3.5 per cent. The global economy is expected to advance by 4.4 per cent, thanks to robust growth of 7.8 per cent in China.

“While we project that global GDP will regain its pre-pandemic level this year, GDP in China is already above that level. However major European economies and Japan are not expected to return to their pre-pandemic GDP levels until 2022 at the earliest,” the institute said.

Read more:
Economy will take two years to bounce back, warns think tank

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt.

Uncategorized

Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione.

Uncategorized

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora.

Disclaimer: Buzzclever.com it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Buzz Clever. All Rights Reserved