GDP – International Comparisons: Key Economic Indicators

UK GDP rose by 1.0% in Q4 2020. It also increased by 1.0% in the US, but fell by 0.6% in the Eurozone. Compared with a year ago, GDP in Q4 2020 was 7.8% lower in the UK and down 5.0% in the Eurozone. In the US, GDP was 2.5% lower.

Please note that headline GDP growth figures across countries are not 100% comparable. For example, the UK takes a different approach than its peers in calculating output in the education and health sectors. This has resulted in the UK’s GDP growth figures during the Covid-19 outbreak to be lower compared with other G7 economies than they otherwise would have been (this effect will unwind during the recovery).

Forecasts

The IMF’s latest forecasts, published 26 January, projected a slightly improved world growth outlook compared with its October forecasts. It forecast UK GDP growth of -10.0% in 2020 and +4.5% in 2021.

The OECD’s latest forecasts, published 1 December, project a sharp contraction in the world economy in 2020 due to Covid-19. The UK is forecast to see a 11.2% fall in GDP in 2020, with 4.2% growth in 2021.