Revised figures for the past two years show that the UK is no longer at the bottom of the G7 countries in terms of post-pandemic recovery. On Friday, revised gross domestic product (GDP) figures were published, indicating that the UK’s economy has grown faster than previously believed. This new information has moved the UK up from the bottom of the Group of Seven countries in terms of post-pandemic recovery. However, this position may not be final as other countries are also expected to revise their data. Chancellor of the Exchequer Jeremy Hunt has stated that these new figures have proven “the doubters wrong.”
According to the Office for National Statistics (ONS), the UK’s GDP grew by an estimated 0.2 percent in the second quarter, and the figure for the first quarter was revised up from 0.1 percent to 0.3 percent. The estimated annual GDP growth for the past two years has also been revised. In 2021, it is now 8.7 percent instead of 7.6 percent, and in 2022, it is 4.3 percent instead of 4.1 percent. The economy’s contraction in 2020 was revised from 11 percent to 10.4 percent. This means that the UK economy has grown by 1.8 percent since the fourth quarter of 2019, before the COVID-19 pandemic began, according to the ONS.
The UK’s rate of recovery appears to be faster than Germany (0.2 percent) and France (1.7 percent) during the same period. However, it is still behind Italy (2.1 percent), Canada (3.5 percent), Japan (3 percent), and the United States (6.1 percent). Previously, the UK was thought to have the worst-performing economy, with an estimated 0.5 percent GDP decline during the period.
Recent revisions to GDP estimates have occurred due to the inclusion of “improved source data and additional updated data,” which have been challenging to estimate due to the impact of COVID-19. The ONS stated earlier this month that GDP had returned to its pre-pandemic level by the last three months of 2021, earlier than initially thought.
Despite these revised figures suggesting a stronger performance for the UK economy, economist Jake Finney from consultancy giant PwC argues that the revisions are not significant enough to change the overall picture of a flatlining economy. He believes that the GDP data revisions may slightly dampen the UK’s growth prospects for 2023 and 2024.
It should be noted that other European countries, including Italy, Spain, and the Netherlands, have also made upward revisions to their economic output for 2021.