By Christian Smith, London
The International Monetary Fund, IMF, has cut its growth forecast for the UK economy after a “weaker-than-expected activity” in the first three months of 2017.
The economy only grew by just 0.2% in the first quarter of 2017. Second quarter GDP figures are expected later this week.
In April, the World Economic Outlook, the IMF forecast growth of 2% in the UK economy. But, in its July update, it stated that the UK would only grow by 1.7% this year.
This is first time the Washington based organisation has downgraded Britain’s economy since the country voted to leave the EU in June 2016.
The treasury said the forecast shows the importance of a good Brexit deal.
The IMF’S updated outlook also revised down the US growth forecast from 2.3% to 2.1%.
The US growth for 2018 was predicted to come in at 2.1%, instead of the 2.5% previously forecast.
However, the Fund has upgraded the expectations for several Eurozone countries including France, Germany, Italy and Spain.
It notes that: “This, together with positive growth revisions for the last quarter of 2016 and high-frequency indicators for the second quarter of 2017, indicate stronger momentum in domestic demand than previously anticipated.”
“The growth forecast for 2017 was also revised up for Canada, where buoyant domestic demand boosted first-quarter growth to 3.7 percent and indicators suggest resilient second-quarter activity, and marginally for Japan, where private consumption, investment, and exports supported first-quarter growth.”