GDP – International Comparisons: Key Economic Indicators

In Q1 2022, GDP in the UK grew by 0.8% compared with the previous quarter (Q4 2021). In the Eurozone GDP growth was 0.2%, while GDP in the US fell by 0.4%, following a strong Q4 2021. 

Compared to the pre-pandemic peak, UK GDP in Q1 2022 was 0.7% higher. This compares with Eurozone GDP being 0.4% higher than its pre-pandemic level, while US GDP was 2.8% higher.

For 2021 as a whole, UK GDP growth was 7.4%. This was the highest in the G7. The UK had the largest decline in GDP among the G7 in 2020 (-9.3%) 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 unwinds), compared with other G7 economies than they otherwise would have been.

Forecasts

On 19 April, the IMF published new forecasts for the world economy. The economic damage from the conflict in Ukraine has lowered global growth forecasts and raised inflation projections. The IMF forecasts UK GDP growth of 3.7% for 2022, down from the 4.7% forecast previously (in January). This is the equal second highest in the G7, behind Canada. In 2023, the UK is forecast to grow by 1.2%, down from 2.3%. This is the lowest projected annual growth rate in the G7.

On 17 March, the OECD published estimates of the economic effects of the Russian invasion of Ukraine. A scenario based on a series of assumptions, including higher commodity prices, resulted in GDP being 1%-point lower in the OECD and globally, with global inflation being 2.5%-points higher, compared with the pre-invasion outlook. The OECD recommended targeted government support to poorer households, which could mitigate up to half of the impact on GDP in OECD economies. The OECD did not publish its regular set of forecasts for the world economy due to the high levels of uncertainty.