In what many experts are viewing as more fallout from Brexit, the International Monetary Fund’s latest GDP forecasts show Britain falling out of its #5 slot in the world’s top economies. The nation was just barely outpaced by France.
UK Treasury Chief Philip Hammond mentioned the new ranking in passing as he included it in his budget speech as part of a series of statements that were designed to highlight Britan’s economic strength.
“London is the number one international finances center. We have some of the world’s best companies. And a commanding position in a raft of tech and digital industries that will form the backbone of the global economy in the future,” Hammond said. “Those who underestimate Britain, do so at their peril.”
But all the cheerleading talk doesn’t stop the reality of pre-Brexit Britain.
The Office for Budget Responsibility said that it sees the UK’s economy growing by a mere 1.5 percent this year and 1.4 percent the next. Previous estimates had been 2 percent and 1.6 percent. In March, that office said that it expected Britain’s economy to grow by 7.5 percent over the next five years. That figure now sits at 5.7 percent over the same period.
Why such a precipitous slide?
Brexit, short and simple. Britain’s growth has decelerated sharply since it voted last year to leave the European Union. Since then, the pound has weakened dramatically, prices have gone up sharply, and consumer spending is down.
The world’s top seven economies, according to the IMF’s 2017 forecast are:
- United States: $19.4 trillion
- China: $11.9 trillion
- Japan: $4.9 trillion
- Germany: $3.7 trillion
- France: $2.575 trillion
- United Kingdom: $2.565 trillion
- India: $2.4 trillion
Reflecting the growth surge in emerging markets, the IMF expects India to surpass both Britain and France in 2019.