A new report from OPera Media says that the global economy remains on track for continued strong expansion in 2007 and 2008, with the UK economy expected to continue growing on, or near, its 2.5% long run trend in 2007 and 2008.
Overall, says OPera, the UK economic picture is positive, with a stable labour market and robust consumer spending. However, the latest retail figures show small signs of the interest rate rises taking effect.
A recent estimate from the National Institute of Economic and Social Research projected that the output of the UK economy in the three months ending in June was 0.7% higher than in the previous three months (see UK Economic Output Grows 0.7%).
Earlier this year, Euroframe forecast that the UK economy will grow by 2.75% in 2007, with growth moderating by just under 0.25% points in 2008 (see 2007 Growth Forecast For UK Economy).
Current International Monetary Fund (IMF) estimates place world expansion at 4.9% for both 2007 and 2008, compared to 5.4% in 2006, with OPera saying that this should be just enough to bring expansion in-line with estimated output capacity, helping to contain recent inflationary pressure.
OPera adds that Eurozone growth is at its fastest pace in six years, with Germany the main driver of expansion, fuelled by robust export growth and strong investment. However, although Eurozone growth remains solid, it is expected to moderate to 3.2% in 2007, down from 2.6% in 2006.
It also forecasts that the US economy will see growth slow from 3.3% to 2.2% in 2007, with slow housing acting as a serious drag on GDP, before once again accelerating in 2008.
Emerging Asian economies continue to expand rapidly, with growth predicted at 8.8% for 2007. China remains the main engine, with its economy predicted to expand by more than 10% for the second year in a row.
Related Links
