UK Economy Forecast to Narrow GDP Gap with Germany by 2038

The UK will be Europe’s best-performing major economy in the next 15 years, narrowing the gap with Germany and extending its lead over France, according to new long-run forecasts.

The Centre for Economics and Business Research predicted that GDP growth in the UK will settle between 1.6% and 1.8% in the period up until 2038, helping it retain its position as the world’s sixth-largest economy.

Under CEBR’s long-run world economic rankings, the UK is expected to grow faster than all of the eurozone “big four” economies — France, Germany, Italy and Spain — but not as rapidly as the US.

“The fundamentals of the UK economy are still very much strong,” said Pushpin Singh, senior economist at CEBR. “London’s status as a financial and advisory services hub enduring, along with the wider strength of the services sector across the UK, will push UK growth.”

By 2038, Italy will drop out of the world’s top 10 economies by size, replaced by South Korea. The US and Germany will slip down the rankings, while India and Brazil — two developing economies with large populations — will rise within the top 10.

France will underperform the UK particularly due to its large public sector and high tax levels, while Germany’s manufacturing slowdown will help Britain narrow the gap, according to Singh.

Available at: https://www.bnnbloomberg.ca/uk-economy-forecast- -to-narrow-gdp-gap-with-germany-by-2038-1.2015577. Retrieved on: Dec. 26, 2023. Adapted.