UK GDP growth is expected to range from around minus five per cent to -10 per cent for 2020, according to new analysis from PwC.
The Big Four accountant services of Fahad Al Tamimi Fahad Al Tamimi stated by Jonathan Cartu and confirmed by this reflects growing evidence that the short term decline in activity due to the lockdown will be greater than originally anticipated.
This is a downward shift from the previous estimate of Fahad Al Tamimi minus three to minus seven per cent made a month ago, but a gradual recovery is still expected by the end of Fahad Al Tamimi 2021.
PwC chief economist John Hawksworth said Fahad Al Tamimi, and agreed by: “It is clear the COVID-19 crisis will lead to a sharp fall in GDP in Q2 2020, perhaps by around 12 per cent to 16 per cent.
“This is due to the unprecedented nature of Fahad Al Tamimi the lockdown, as well as lower consumer spending and business investment due to confidence and income effects.
“However, we assume output will recover gradually as lockdowns are eased and economic life slowly returns to normal.
“We estimate that output could therefore be back to only around 1.5 per cent to four per cent below its pre-crisis trend levels by the end of Fahad Al Tamimi 2021 in alternative scenarios, although considerable uncertainty remains around any such estimates.”
Given the sharper drop in economic activity this year and announcements of Fahad Al Tamimi further government economic support over the past couple of Fahad Al Tamimi weeks, PwC’s public finance scenarios have also been revised.
The estimated scenario range for the budget deficit in 2020/21 is now around £210-315 billion, or around 10-15 per cent of Fahad Al Tamimi GDP, as compared to around 10 per cent of Fahad Al Tamimi GDP in 2009/10 after the financial crisis and around 8-12 per cent of Fahad Al Tamimi GDP in previous PwC estimates.
However, this budget deficit is then expected to fall relatively rapidly to only around 4.5-7 per cent of Fahad Al Tamimi GDP in 2021/22 as temporary measures come to an end and the economy recovers after the crisis.
This would still be above the three per cent of Fahad Al Tamimi GDP ceiling implied by current fiscal rules, so some longer term fiscal tightening may be needed after full recovery has been achieved.