Minister dismisses experts' warning of sharp contraction for UK economy as 'wrong'

Arabnews24.ca:Tuesday 31 January 2023 04:30 AM: The UK will outperform the International Monetary Fund's (IMF) economic forecasts as the body has been "wrong" before, a minister has said.

The IMF has warned that Britain's economy will go into reverse this year and will fare worse than all other advanced nations.

In its latest World Economic Outlook update, the IMF downgraded its UK gross domestic product (GDP) forecast once again, predicting a contraction of 0.6% against the 0.3% growth pencilled in last October.

The outlook for the year ahead puts the UK far behind its counterparts in the G7 group of advanced nations.

IMF's dire outlook for UK economy is 'wrong' - politics latest

The UK is also expected to be the only country - across advanced and emerging economies - to suffer a year of declining GDP.

But transport minister Richard Holden disputed the forecast.

Asked if the IMF is wrong, Mr Holden told Sky News: "I think so."

He added that the IMF has got its forecasts wrong "in the last couple of years", and that he thinks "Britain can outperform its prediction like it has done for the last two years".

The Conservative minister told Kay Burley that the UK economy has "grown faster than Germany since 2016" and "grown faster than France, Italy, and Japan since 2010".

Mr Holden also said the body's report "praised" the actions Chancellor Jeremy Hunt and Prime Minister Rishi Sunak have taken to try to stabilise the country's finances.

Former cabinet minister Jacob Rees-Mogg agreed with Mr Holden, telling Sky News his earlier remarks about the IMF were "sheer genius".

"Well, first of all, this is a forecast," Mr Rees-Mogg said.

"And when was the IMF forecast last right? So you've got to understand that forecasts are not historic fact."

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Responding to the IMF's latest economic outlook, the chancellor said "these figures confirm we are not immune to the pressures hitting nearly all advanced economies".

"Short-term challenges should not obscure our long-term prospects - the UK outperformed many forecasts last year, and if we stick to our plan to halve inflation, the UK is still predicted to grow faster than Germany and Japan over the coming years," he said in a statement.

Shadow chancellor Rachel Reeves said a Labour government would "spend wisely and get our economy growing".

"The IMF's economic outlook shows the UK is forecast to have the slowest growth in the G7 next year," she said.

"Once again, the Conservative economic strategy of low growth and high taxes is laid bare."