OECD revises UK growth forecast
Growth figure for 2013 downgraded from 1.9 percent to 0.9 percent
By Gaurav Sharma | CFO UK | Published 15:01, 27 November 12
The Organisation for Economic Cooperation and Development (OECD) downgraded UK’s GDP growth rate for 2013 from 1.9 percent to 0.9 percent in an announcement on Tuesday.
It also predicted that the UK economy would contract by 0.1 percent this year following a blanket revision of the figures it published in May.
The France-based organisation said, "Real UK GDP growth is projected to rise gradually during 2013 as falling inflation boosts purchasing power and private consumption, and a brighter international environment supports exports and investment."
OECD said that if UK economic growth turns out weaker than expected, Chancellor George Osborne should ease the country’s austerity drive in the short term even if it meant missing his key target of reducing public sector debt.
"In the event of lower than expected growth, the flexibility of the fiscal mandate should be utilised to allow the automatic stabilisers to continue to operate, even though this may imply pushing out the debt target," it added.
The OECD said, the UK could change the composition of its spending to focus on long term growth-enhancing public sector investment, including spending on infrastructure.
Earlier, the latest publication of the UK’s third quarter GDP by the Office for National Statistics (ONS) confirmed that the country is officially out of a recession.
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