The International Monetary Fund (IMF) has revised its growth forecast for the UK upwards in its latest World Economic Outlook, following a better-than-expected performance after the Brexit vote.
The fund now places estimations of the British economy performance at 1.5 percent, as opposed to the more frugal forecast of 1.1 percent made back in October. Despite the revision, global outlook for world economies remained at by 3.4 percent in 2016 and 3.6 percent in 2018 respectively.
Whilst the improved estimate may be indicative of a more resilient British economy, the organisation did warn against the potentially destabilising effect of trade agreement negotiations and the potential introduction of trade barriers.
“Preliminary third-quarter growth figures were somewhat stronger than previously forecast in some economies, such as Spain and the United Kingdom, where domestic demand held up better than expected in the aftermath of the Brexit vote,” stated its most recent World Economic Outlook report.
In addition, the forecast highlighted the uncertainty surrounding the impending Trump presidency may have upon the development of the global economy and this was reflected in the revision in expected growth for the UK’s economy in 2018.
“There is a wide dispersion of possible outcomes around the projections, given uncertainty surrounding the policy stance of the incoming US administration and its global ramifications.” It added.
In light of these concerns, the UK’s economic forecast in 2018 was from 1.7 percent last October’s projections to 1.4 percent.
In respect to the U.S, despite persistent ambiguity over what Trump’s policy agenda may entail, the organisation made speculative estimations over the world’s biggest economy future growth. IMF economists expect Trump’s administration to pursue tax cuts and the implementation of spending measures to bolster the economy.
In light of this, The IMF anticipates the US economy to grow by 2.3 percent for 2017, a slight upgrade from October’s estimate of 2.2 percent, with 2018 projections similarly raised to 2.5 percent from 2.1 percent.
President-elect Donald Trump is set to be inaugurated into office on Friday. Read about Mr Trump’s latest comments about Brexit in his first British newspaper interview here.