UK expected to avoid recession in 2023: IMF

The United Kingdom's (UK) economy is expected to avoid a recession this year, as it is buoyed by resilient demand in the context of declining energy prices, the International Monetary Fund (IMF) said on Tuesday, reported Xinhua.

The country's gross domestic product (GDP) will grow by 0.4 percent in 2023, a 0.7 percentage point upgrade to the April forecast of a 0.3 percent contraction, the IMF noted in a statement.

The IMF said the improved outlook reflects higher-than-expected resilience in demand, with stronger wage keep-up with inflation, a less contractionary fiscal stance, and improved confidence amid somewhat reduced post-Brexit uncertainty.

On the supply side, it added, the UK economy has seen declining energy costs and normalization of global supply chains.

Still, economic activity has slowed significantly from last year and inflation remains stubbornly high following the severe terms-of-trade shock due to the Ukraine crisis and, to some extent, labor supply scarring from the COVID-19 pandemic, the IMF said.

The UK economy grew by 0.1 percent in the first quarter of this year. Despite the expansion, the country's quarterly GDP is still 0.5 percent below its pre-COVID-19 level in the fourth quarter of 2019.