GDP – International Comparisons: Key Economic Indicators

In Q2 2022, GDP in the UK fell by 0.1% compared with the previous quarter (Q1 2022), following growth of 0.8% in Q1. US GDP also fell by 0.1% in Q2 2022. In the Eurozone, GDP growth was 0.8% in Q2 2022.

Compared to the pre-pandemic level, UK GDP in Q2 2022 was 0.6% higher. This compares with Eurozone GDP being 1.4% higher than its pre-pandemic level, while US GDP was 2.6% higher.

For 2021 as a whole, UK GDP growth was 7.4%. This was the highest in the G7. The UK had the largest decline in GDP among the G7 in 2020 (-9.3%) and its relatively strong performance in 2021 was to some degree a recovery from weakness in 2020. (The UK’s Office for National Statistics has indicated that UK GDP for 2020 is likely to be revised down when new data is published on 30 September.)

Please note that headline GDP growth figures across countries are not 100% comparable. For example, the UK takes a different approach to others in calculating output in the education and health sectors. This has resulted in the UK’s GDP growth figures being lower in 2020, and higher in 2021 (as this effect unwinds), compared with other G7 economies than they otherwise would have been.

Forecasts

On 26 July, the IMF published new forecasts for the world economy. The IMF noted increasingly gloomy developments in 2022 have led to downgrades to its GDP forecasts combined with higher expected inflation. The IMF forecasts UK GDP growth of 3.2% for 2022, and 0.5% for 2023 – that’s down from the 1.2% forecast in April.

On 8 June, the OECD published new forecasts for the world economy. The conflict in Ukraine and global supply-chain disruptions have lowered global growth forecasts and raised inflation projections. The OECD forecasts UK GDP growth of 3.6% for 2022, down from the 4.7% forecast previously (in December). In 2023, GDP growth is forecast to be 0.0%, down from 2.1%.