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United Kingdom: GDP drop in 2020 now estimated at 9.8%

2021-03-31T08:55:43.185Z

The UK suffered a drop in its gross domestic product of 9.8% in 2020 due to the pandemic, according to a new estimate released by the National Bureau of Statistics (ONS) on Wednesday, from a previous estimate of 9.9 %. This figure, despite the slight revision, confirms the magnitude of the shock of the health crisis on the economy of the United Kingdom, which records the worst GDP drop in 300 year



The UK suffered a drop in its gross domestic product of 9.8% in 2020 due to the pandemic, according to a new estimate released by the National Bureau of Statistics (ONS) on Wednesday, from a previous estimate of 9.9 %.

This figure, despite the slight revision, confirms the magnitude of the shock of the health crisis on the economy of the United Kingdom, which records the worst GDP drop in 300 years and the strongest of the G7 countries in 2020.

Read also: Covid-19: after a year of the epidemic, is the United Kingdom out of the woods?

The ONS specifies in a press release that it has reassessed more clearly certain quarterly variations for the year 2020. Growth was more lively than expected in the fourth quarter, at + 1.3% (against + 1.0%), and this despite the containment in November, as well as in the third quarter, at + 16.9% (against + 16.1%).

On the other hand, the plunge of the second quarter, which corresponds to the containment of the spring, was stronger than estimated, at -19.5% (against -19%).

A rebound expected in 2021

Economists expect a rebound in 2021 thanks to the deployment of vaccines and the gradual lifting of restrictions during the spring.

British GDP, however, fell by 2.9% in January alone, due to the new confinement in place since the end of December and which begins to be gradually lifted since the beginning of March with the reopening of schools.

The firm EY Item Club estimates that the decline in GDP over the first quarter should be limited and reach 1%, citing "

signs that activity has picked up in February and March

".

He predicts a 5% rebound for the whole of 2021.

The “

flash

PMI index

of the Markit firm had witnessed last week a strong rebound in private sector activity in March.

With the planned reopening of non-essential businesses and restaurants, Ruth Gregory, analyst at Capital Economics, believes that household spending will now support growth.

To read also: "The United Kingdom has a problem of second dose" warns Jean-Yves le Drian

Consumption could, according to her, "

go from the weakest component of the economy to the strongest in 2021

", with some households expected to reduce their level of savings after having put money aside since. the start of the health crisis.

Source: lefigaro

All business articles on 2021-03-31

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