National Institute of Economic and Social Research announced its World and UK Economy third quarter forecast at its regular press conference in Westminster yesterday, on 19 October 2010.

Senior Research Fellow Dawn Holland presented the recent figures of the world economy at the conference. According to the research that was done by Holland ,Ray Barrell and six other research fellows of the organisation :

Research Fellows; Simon Kirby(from left to right),Dawn Holland and Ray Barrell present prospects for the world and the UK economy at NIESR's third quarter press conference in Westminster.

World GDP growth will be 4.9% in 2010 and to decrease to 4.5% in 2011.

China is to grow by 10.7% by the end of 2010 and will become the largest economy in the world in 2019 while Japan growth reaches 3.2 %  in 2010.

Despite  fears of double-dip recession in the country, US will grow by 2.8% both in 2010-2011. Euro Area ‘s growth will be only 1.8% in 2010 and 2.1% in 2011.

Canada is to be the first G7 country to regain pre-crisis level of output by the end of this year while OECD  output will be reaching  pre-crisis level in the first quarter of 2011.

World trade will grow by 13.5 per cent this year and 10.3 per cent in 2011.

German output will increase by 3.4 per cent this year and 2.8 per cent in 2011.However, Greek GDP will shrink by 3.1 per cent in 2010 and 1 per cent next year. Output in Spain and Ireland will fall this year, by 0.1 and 0.4 per cent respectively.

Prospects for the UK economy was presented by NIESR’s research fellow Simon Kirby at the conference. Kirby’s research showed that:

GDP growth in the UK  expected to be 1.6% this year and in 2011 and will rise to 2% in 2012.

Consumer spending to rise by 0.8% this year and will stagnate in 2011.Real incomes expected to drop by 0.8% in 2010 and 0.6% in 2011.

30 months after the recession the UK economy remains  4% below pre-recession peak.

Unemployment in the UK has stabilised but it will rise to 8.5% in 2011.

Dr Ray Barrell explained the fiscal policy at the end of the press conference.

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