UK set to become worst performing G7 economy this year as IMF says world economy entering 'perilous phase'

11 April 2023, 15:19 | Updated: 11 April 2023, 15:25

The IMF says the UK is to become the worst performing economy in G7 this year
The IMF says the UK is to become the worst performing economy in G7 this year. Picture: LBC / Alamy

By Danielle DeWolfe

The International Monetary Fund (IMF) has today announced the UK looks set to be the worst performing advanced economy in the G7 this year, as it warned the world economy was entering a 'perilous phase'.

The IMF which monitors the international monetary system, is holding its Spring meetings in Washington this week and made the announcement in light of the latest results.

Now, forecasts show the world economic output is set to be at its weakest level since the publishing of forecasts began back in 1990.

The IMF's chief economist, Pierre-Olivier Gourinchas, added that results show inflation has had a bigger impact on world economies than first expected.

According to the figures, UK GDP is set to shrink by 0.3% in 2023 - worse than any other G7 country.

The IMF, which is holding its Spring meetings in Washington this week, made the announcement in light of results showing world economic output was at its weakest level since the publishing of forecasts began in 1990.
The IMF, which is holding its Spring meetings in Washington this week, made the announcement in light of results showing world economic output was at its weakest level since the publishing of forecasts began in 1990. Picture: LBC / Alamy

The revised forecast in an improvement on the Fund’s initial predictions three months ago, which suggested the UK was heading for a 0.6% contraction of the economy this year.

The figures are contrasted by those of the US, with forecast showing the country's economy looks set to grow by 1.6% this year, and 1.1% in 2024.

Mr Gourinchas said: "We are… entering a perilous phase during which economic growth remains low by historical standards and financial risks have risen, yet inflation has not yet decisively turned the corner."

Read more: CBI boss Tony Danker sacked following misconduct claims

Read more: Judge asks jury if it's fine to call them 'ladies and gentlemen' and says he understands some view that as old-fashioned

"Below the surface, turbulence is building, and the situation is quite fragile, as the recent bout of banking instability reminded us.

The UK's figures are contrasted by those of the US, with forecast showing the country's economy looks set to grow by 1.6% this year, and 1.1% in 2024.
The UK's figures are contrasted by those of the US, with forecast showing the country's economy looks set to grow by 1.6% this year, and 1.1% in 2024. Picture: LBC / Alamy

"Inflation is much stickier than anticipated even a few months ago. While global inflation has declined, that reflects mostly the sharp reversal in energy and food prices.

"But core inflation, excluding the volatile energy and food components, has not yet peaked in many countries."

IMF has also cut its forecast for global economic growth by 0.1 percentage points both this year and next, with the revised forecast reduced to 2.8% and 3% respectively.

The news follows the collapse of US-based Silicon Valley Bank and Credit Suisse in Europe, with volatile economic markets likely to cause further financial turbulence in the coming months.

More Latest News

See more More Latest News

Iran

Official says rescuers see helicopter that was carrying Iran’s president

Taiwan President

Lai Ching-te inaugurated as Taiwan’s president which will likely bolster US ties

Rescue teams’ vehicles are seen near the site of the incident of the helicopter carrying Iranian President Ebrahim Raisi in Varzaghan in north-western Iran

Helicopter carrying Iran’s president apparently crashes in mountainous region

The "real-life" Martha from Netflix's Baby Reindeer bombarded Labour leader Sir Keir Starmer with a vile 276 email spree over eight months, reports claim.

Real-life Martha from Baby Reindeer bombarded Keir Starmer with vile email spree, reports claim

Rachel Reeves has said Rishi Sunak and Jeremy Hunt are gaslighting Brits over the economy - as Labour analysis claims high inflation has cost workers almost the equivalent of a 1p hike in tax.

Reeves accuses Sunak of gaslighting Britain on economy as research claims Inflation 'costs UK same as 1% tax hike'

Prime Minister Rishi Sunak is set to offer the first government apology for the infected blood scandal as the public inquiry into the disaster publishes its final report.

Sunak set to apologise for infected blood scandal which killed 3,000 as inquiry publishes report

Iran's president is missing after a helicopter he was travelling in crashed - with sources in Tehran warning his life is in danger.

Pictured: Iranian president's helicopter taking off just moments before crash in adverse weather

File photo dated 16/10/13 of HMP Barlinnie in Glasgow. The Scottish Government has been accused of moving at a 'snail's pace' in refreshing the prison suicide prevention strategy. The documen

'Up to 23,000 criminals each year to avoid jail' if Government loosens sentences as prisons fill up

Pep Guardiola has hailed his history-making Manchester City side but admitted his future at the club is in doubt after his sixth top-flight win.

'It's insane': Pep Guardiola hails Manchester City record-breakers as side wins fourth Premier League in a row

Iran's President Ebrahim Raisi is feared dead after his helicopter crashed in the repressive nation's north-west.

Who is Ebrahim Raisi?: Iran's President nicknamed 'The Butcher of Tehran' feared dead after helicopter crash

The helicopter carrying Iranian President Ebrahim Raisi takes off at the Iranian border with Azerbaijan after President Raisi and his Azeri counterpart Ilham Aliyev inaugurated dam of Qiz Qalasi, or C

What we know so far about incident involving helicopter carrying Iran president

Sean "Diddy" Combs has broken his silence and apologized after a distressing video was shared of him physically assaulting his former girlfriend Cassie in 2016.

'I'm disgusted': Sean 'Diddy' Combs breaks silence on shocking footage of him physically assaulting ex

Producer-director-writer John Krasinski attends the premiere of Paramount Pictures’ IF at the SVA Theatre in New York

John Krasinski’s IF hits box office nerve with £27.5m North American debut

Kinshasa

Democratic Republic of Congo’s army says it foiled coup attempt

Flowers are placed outside the FD Roosevelt University Hospital, where Slovak Prime Minister Robert Fico is being treated, in Banska Bystrica, central Slovakia

Slovakia PM Robert Fico remains in serious condition but prognosis ‘positive’

The number of small boats arriving in the UK is 2,600 higher than this time last year

Number of migrants arriving in UK in small boats nears 10,000 - 2,600 higher than this time last year