National Institute of Economic and Social Research(NIESR) has launched new issue of National Institute Economic Review at its final quarter press conference today in Westminster,London.
NIESR’s latest forecast has focused on impact of oil price on a financially fragile economy, trend growth and output gap in the UK and the debt crisis in Europe.
Dawn Holland has presented prospects for the world economy researched by Holland, Ray Barrel, Aurelie Delannoy, Tatiana Fic, Ian Hurst,Ali Orazgani and Pawel Paluchowski.
Simon Kirby (From left to right),Dawn Holland and Ray Barrell at NIESR's Press Conference in Westminster.
According to Holland’s presentation world economic growth is to slow by 4.2% due to high oil price which rose $20/barrel in last quarter of 2010 and is to reach $95 in 2011.World trade will increase by 7.8 per cent this year and 5.7 per cent in 2012.While Chinese GDP will be growing by 9 per cent in 2011 and 8.1 per cent in the following year Japanese GDP will expand only by 2.2 per cent this year.
Holland and her researcher friends estimate that Euro Zone GDP is to grow by 1.7 per cent despite the sovereign debt crisis and 2 per cent in 2012.Germany will be leading the recovery with GDP rising by 2.6 per cent however its contribution will be less in 2011 as national output rose by 3.6 per cent. Greece economy will shrink by 1.9 per cent in 2011 while Irish GDP will rise by 1.7 this year despite the fact they both were bailed out. Portugal is expected to be the next country to be bailed out as its output is to decline by 0.8 per cent this year.
The American economy that regained its pre-crisis level of output in the last quarter of 2010 will grow by 2.6 per cent this year .However the unemployment rate is to remain at 9.7 per cent.
Prospects of the UK economy that researched by Simon Kirby, Ray Barrell and Rachel Whitworth was presented by Kirby at the conference. According to forecast UK economy will grow by only 1.5 per cent in 2011 which was 1.4 per cent in 2010 and average growth will be 0.1 per cent until the middle of this year. Consumer price inflation will reach 3.8 per cent due to high oil price but will fall to 1.8 per cent in 2012. High oil price will also cause real incomes to fall by 1 per cent. However interest rates may well have to rise in the Spring to help the pressure of inflation.
Uk GDP growth will reduce by 0.5 per cent in 2011 while unemployment increase by 8.8 per cent in the third quarter of this year.320.000 more people will be unemployed and average hours worked in 2011 will rise.Retirement age is expected to reach 68 by 2020 due to the high cost of aging population according to the forecast.
Sefrew's Blog 