Posts Tagged ‘GDP’

National Institute of Economic and Social Research (NIESR) launched its latest economic review at the organization’s quarterly press conference yesterday in Westminster, London.

According to NIESR’s review of UK economy, GDP is to grow by 1.7 per cent in 2016 and drop to 1 per cent in 2017 and will continue to deteriorate in the third and fourth quarter. Inflation  is to increase and peak at 3 percent at the end of 2017.

UK will barrow additional £47 billion within the next five years, the forecast predicted.

Simon Kirby, Head of Macroeconomic Modelling and Forecasting at NIESR, who presented UK economy at the conference explained that :“We expect the UK to experience a marked economic slowdown in the second half of this year and throughout 2017. There is an evens chance of a ‘technical’ recession in the next 18 months, while there is an elevated risk of further deterioration in the near term. In light of the downturn underway and the downside risks to the outlook, a decision by the MPC to provide monetary stimulus would be welcome and we look forward to assessing the new Chancellor’s plans at the Autumn Statement.”

recession after brexit

NISER expects the unemployment rate to rise  from 4.8 per cent in the second quarter of  2016  to a peak of around 5,75 per cent in the middle of 2017.The organization estimates that the economy will shrink in 2016Q3 and lead to a recession at some point during the period 2016Q3 to 2017Q4, inclusive.

Dr Angus Armstrong, Director of Macroeconomics at NIESR, presented the organization’s  forecast of the world economy following Simon Kirby. According to the forecast the world economy is expected to grow by 3.0 per cent in 2016 and peak at 3.5 percent in 2017.  Inflation is likely to be below target in the OECD economies in 2017. The European Central Bank (ECB) stands ready to ease monetary conditions while the Federal Reserve is likely to raise interest rates gradually.

“Re-joining EFTA (European Free Trade Association) is consistent with the notion of ‘taking back control’. This will result in less economic integration with the EU and so lower productivity and output over the medium term. The critical issue is whether the UK can strike deep trade deals with our trading partners elsewhere.  This could be  joining the Trans Pacific Partnership or the Transatlantic Trade and Investment Partnership. At this stage both face significant challenges due to lack of popular support,” said Dr Armstrong at the press conference.

Forecast shows that Brazil, Japan and Russia economies are to grow . India is likely to remain the fastest growing major economy. The US is expected to grow by 2.3 per cent in 2017, with the Fed likely to raise interest rates only very gradually. Inflation is expected to be slightly lower .OECD average inflation will remain well below central banks’ targets through to 2018. The exception is the UK where a short-term rise reflecting the depreciation of sterling is expected, NIESR’s forecast indicated.


National  Institute of Economic and Social Research announced  its quarterly review  to explain prospects  for the  world and the UK economy at the organisation’s regular press  conference  yesterday in Westminster. The Institute also declared medium terms prospects for the Public Finances.

The press conference was delayed for one week due to  late statistics received from ONS , said  senior research fellow Dr Ray Barrel who chaired and  presented  third  part of the event.

Simon Kirby ,researcher,(from right to left),Dawn Holland ,senior researcher , Dr Ray Barrell ,senior researcher at NIESR's press conference in Westminster yesterday.

Dawn Holland , senior researcher fellow of the Institute, who used NIGEM model in her research,   explained  prospects for the world economy. Holland’s findings show that the world economy expanded by 1.2 per cent in first quarter of the year and it will annualise at the rate of 4.8 per cent and it will drop to 4.4 per cent in 2011.Global recovery will  continue to be led by Asian countries like China, India, Taiwan, Korea, Japan and Hong Kong  while USA ,Canada and Brazil see moderate growth .Europe will  still revive its economy with external demand .

The world trade will increase by 14.2 per cent in 2010 and 8.8 per cent in 2011 according to Holland’s research. NIESR estimates that interest rates to remain low over the next year and will increase in 2011 in most countries. The annual inflation in OECD  as a whole forecast will average 1.8 per cent in 2010.

While  Euro Area will be expanding by 1.3 per cent this year and 1.8 per cent in 2011 ,Greece’s debt stock will decrease by 15 per cent  of GDP .If  spreads  returned to January 2010 level  Greece’s  GDP will improve 0.9 per cent next year.

China will drive the global recovery with 11.6 per cent growth this year and will continue next year by 8.3 per cent expansion. Japan will follow as a second leading country  growing by 3.3 per cent this year and 1.1 per cent  next year further explained Holland.

Simon Kirby ,NIESR’s  research fellow, revealed his recent research on prospects for the UK economy at the conference. According to  Kirby’s research  GDP in the UK will grow by 1.3 percent in 2010 and 1.7 in 2011.It will continue to increase in 2012 by 2.2 per cent. Inflation  will be above the target  until 2012 due to increased VAT. In 2012 inflation rate will be below the target which is 1.4 per cent per annum. The coalition government’s consolidation programme will increase public sector net barrowing sharply from 10.9 per cent of GDP  in 2009-2010 to 2.8 per cent of GDP in 2015-16.

Kirby’s  research also shows that “Emergency Budget” will reduce  the economic growth rate by 0.4 per cent in 2011.

In the third section of the conference ,senior researcher Dr Ray Barrell talked about  his research on medium term prospects for the public finances which suggests consumption plans .Barrell’s  research also explains the positive impact of later retirement  on the UK economy.

Holland, Kirby and Barrell answered the questions of the participants at the end of the conference.

National Institute of Economic and Social Research revealed its 2010 world and UK economy Forecast  at  its regular press conference in Westminster on 29 April.

The conference  started in the management of NIESR’s director Dr Martin Weale  and covered  three titles ,which were explained by  a different  researcher of the Institute, such as ; “Prospect for the World Economy“, “Prospect for the UK Economy”, “Medium Term Prospects for the Public Finances“.

Senior researcher Dawn Holland   explained  “Prospects for the  World Economy”. According to Holland’s  research ,global output regained its pre-crisis peak in the first quarter of 2010.The world economy  will grow by almost 4 per cent in 2010  despite the  polarisation between buoyant emerging economies and hard-hit developed countries especially  in Europe  .NIESR expects the US and Canada to return to previous peak levels of output by the end of this year ,while recover in the UK, Italy, Germany is expected to be delayed until 2012-14.

Researcher Simon Kirby(from left to right),Director of NIESR Dr Martin Weale,Senior researchers Dawn Holland and Ray Barrel revealed 2010 the World and the UK economy forecast at NIESR's press conference in Westminster.

Despite the intense pressure from the US for an early revaluation of the yuan ,China has been a leading the global recovery by  increasing its GDP by 11.9 per cent in the first quarter of 2010 according to Holland’s report.

Stock building  in 2010 is expected to contribute 0.9 percentage points to US growth of 2.9 per cent and 0.5 points to Euro |Area growth of 1.2 per cent further explained Holland.

NIESR expects that labour input to decline in Japan,Finland,Greece while US,Australia and Canada to benefit from hours worked rising by around 1 per cent a year in 2012-16 and annual TFP growth at or close to 1.5 per cent.

If  Greece’s recently increased bond spreads are sustained for five years ,outlook for GDP growth would reduce by about 1 per cent per annum according to report. Weale said,it is too soon to estimate  whether Greece will be suspended from Euro Zone  when he was asked  .

Simon Kriby, a researcher of the Institute, revealed the figures of  UK economy under  the title of “Prospects for the UK Economy.”

According to Kirby’s research ,GDP will grow by 1 per cent in 2010,picking up to 2 and 2.2 % in 2011 and 2012.Unemployment will peak at 2.7 million in 2011.Consumer-price inflation will average 3.1 % in 2010 will fall below 2% in 2011 and 2012.

Ray Barrel, senior researcher, and Simon Kirby set out a baseline projection for the level of borrowing and debt in the UK over the 20 years  to explain “Medium Term Prospects for the Public Finances.”

Barrel and Kirby’s projection indicates that real wages in the public sector will decline by nearly one per cent  over the next five years and in mid 2015 public sector borrowing will be 4.5 per cent of GDP.

By 2020 the direct tax will have to rise by another 1.25 per cent GDP and the government deficit will be below 3 per cent with no further cuts in spending  or increases in taxes according to the projection.

The pair also project that long term interest rates of  5 per cent in 2020 and inflation of 2 per cent mean that bond holder will have a real return of 3 percent and a repayment of principal of 2 per cent.

In 2024-6 state pension ages will rise from 65 to 66 due to increased number of people of pensionable age. Taxes will have to increase half percent of GDP equivalent to 1,5 pence ,to pay for ageing by 2030.

Dr Martin Weale and other three researchers Barrel, Holland and  Kirby  took questions after revealing  the 2010  World and the UK Economy Forecast.

National  Institute of Economic and Social Research  Announced Its Review of Labour’s Performance  Since 1980s at a Press Conference  in Westminster today,24 April.

Dr Martin Weale ,the director of  NIESR and Timothy Besley  from London School of Economics   revealed their researches  about Labour’s Economic Performance  and Monetary Policy Under Labour respectively  at  a press conference  at NIESR building  in Westminster  on Friday 24 April .

Dr Weale  started his lecture with  Gordon Brown’s  2006 claims : “The test of our  monetary policy is that we are achieving sustained stability and growth ,not just for a year or two but for the long term. And the test of our fiscal policy is that we match a commitment to balance the current budget over the economic cycle with an ability to make the necessary long term investments.” ,  and  evaluated the Labour’s economic performance  with related graphs and figures  .

Dr Weale  also compared Labour’s economic performance with Conservatives’  performance between 1980 and 2010 during  his clearly delivered  lecture.

Dr Martin Weale evaluates Labour's Performance

Director of NIESR Dr Martin Weale with a TV presenter at press conference after his speech.

Dr Weale surmised that  that Labour’s  policy structure has failed while GDP performance has survived the recession and productivity has improved. However Labour market performance is better than in 1979-1997 but not if compared to other G7 countries  and Labour’s performance during the recession has been poor.

Timothy Besley explained inevitability of inflation targeting   in macroecomies  which came to life in 1970s.

“Inflation targeting in the UK is often associated with Labour’s decision to grant the Bank of England independence in May 1997.” said Besley.

Besley continued his speech with volatility of inflation in the UK  since 1992  and explained the challenges UK economy has to face in future .

According to Besley’s research ,UK monetary policy must face up to some formidable challenges.First ,to learn how to control inflation and stabilise  the economy using previously untried tools.Second ,to maintain the credibility of the inflation targeting  targeting regime in the face of greater independence between monetary and fiscal policy ,and between monetary policy and support to the banking system and financial markets.

Weale and Besley took questions from the press members at the end of their lectures.

NIESR will hold its regular press conference to present the forecast for the UK and World Economies on Thursday  29th April at 11am.