U.K. raises its 2012 growth forecast to 0.8% from earlier projection of 0.7%, confirms 2013 prediction of roughly 2% growth
March 21, 2012
– Britain will grow slightly more than anticipated this year even though many of the countries that use the euro are likely to fall back into recession, the country's finance minister said Wednesday.
In his annual budget statement, George Osborne said Britain's economy was likely to grow by 0.8 percent this year, according to independent forecasts from the Office for Budget Responsibility, which is tasked by government to come up with economic projections. That's slightly higher than the 0.7 percent increase it forecast as recently in November.
Osborne said Britain, the biggest European economy that doesn't use the euro, was likely to avoid a technical recession, officially defined as two consecutive quarters of negative growth. In the last three months of 2011, Britain contracted by a quarterly rate of 0.2 percent. In 2013, Osborne projected that Britain's economy would grow 2 percent, slightly lower than the previous forecast of 2.1 percent.
The growth rates being forecast are still lower than the country's long-run average of around 2.5 percent.
Osborne also said that Britain would borrow 126 billion pounds ($199 billion) in the fiscal year to end-March, 1 billion pounds less than previously projected. He also said the peak in the country's debt will be lower than previously anticipated at 76.3 percent in 2014-15.
Osborne said the budget "reaffirms our unwavering commitment to deal with Britain's debt."
Britain's public finances were savaged by the banking crisis and subsequent recession, which proved to be the country's worst since World War II.
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