GDP – International Comparisons: Key Economic Indicators

In Q2 2022, GDP in the UK rose by 0.2% compared with the previous quarter (Q1 2022), following growth of 0.8% in Q1. US GDP fell by 0.1% in Q2 2022. In the Eurozone, GDP growth was 0.8% in Q2 2022.

Compared to the pre-pandemic level, UK GDP in Q2 2022 was 0.2% lower (this figure was recently revised lower). This compares with Eurozone GDP being 1.8% higher than its pre-pandemic level, while US GDP was 3.5% higher.

For 2021 as a whole, UK GDP growth was 7.5%. This was the highest in the G7. The UK had the largest decline in GDP among the G7 in 2020 (-11.0%) and its relatively strong performance in 2021 was to some degree a recovery from weakness in 2020.

Please note that headline GDP growth figures across countries are not 100% comparable. For example, the UK takes a different approach to others in calculating output in the education and health sectors. This has resulted in the UK’s GDP growth figures being lower in 2020, and higher in 2021 (as this effect unwound), compared with other G7 economies than they otherwise would have been.

Forecasts

On 27 September, the OECD published new forecasts for the world economy. The OECD downgraded 2023 GDP growth forecasts for many countries, reflecting high inflation and rising interest rates. The OECD forecasts UK GDP growth of 3.4% for 2022, reflecting a bounceback compared with 2021’s pandemic-affected performance. For 2023, the OECD forecasts growth of 0.0% – that’s unchanged from its forecast in June.

On 26 July, the IMF published new forecasts for the world economy. The IMF noted increasingly gloomy developments in 2022 have led to downgrades to its GDP forecasts combined with higher expected inflation. The IMF forecasts UK GDP growth of 3.2% for 2022, and 0.5% for 2023 – that’s down from the 1.2% forecast in April.