The UK’s economy has grown faster than was previously thought, according to revised gross domestic product (GDP) figures published on Friday.
It moved the UK up from the bottom of the Group of Seven (G7) countries in terms of post-pandemic recovery, although the position may not be final as other countries are also set to revise their data.
Chancellor of the Exchequer Jeremy Hunt has said the new data have proven “the doubters wrong,”
According to the Office for National Statistics (ONS), the UK’s GDP, or the value of goods and services produced in a given period, grew by an estimated 0.2 percent in the second quarter.
The figure for the first quarter was revised up from a previous estimate of 0.1 percent to 0.3 percent.
The estimated annual GDP growth for the past two years has been revised up from 7.6 percent to 8.7 percent in 2021 and from 4.1 percent to 4.3 percent in 2022.
In 2020, the economy shrank by 10.4 percent, instead of 11 percent as previously thought.
This means the UK economy is now estimated to have grown by 1.8 percent since the fourth quarter of 2019 before the COVID-19 pandemic hit, the ONS said.
It suggests the rate of recovery has been faster than Germany (0.2 percent) and France (1.7 percent) during the same period, although it’s still behind Italy (2.1 percent), Canada (3.5 percent), Japan (3 percent), and the United States (6.1 percent).
The UK was previously thought to have been the worst-performing economy, with an estimated 0.5 percent GDP decline during the period.
There have been a series of revisions to GDP estimates recently after the ONS included “improved source data and additional updated data.”
The statistics office said COVID-19 has made it challenging to estimate the GDP for the period.
Earlier this month, the ONS said that it now believes GDP bounced back to its pre-pandemic level by the last three months of 2021, much earlier than first thought.
ONS chief economist Grant Fitzner said on Friday: “Our new estimates indicate a stronger performance for professional and scientific businesses due to improved data sources.
“Meanwhile, health care grew less because of new near real-time information showing the cost of delivering services.”
Noting that the figures suggest the British GDP grew at a faster pace than France and Germany, Mr. Hunt said we now “know that the British economy recovered faster from the pandemic than anyone previously thought and data out today once again proves the doubters wrong.”
“The best way to continue this growth is to stick to our plan to halve inflation this year, with the [The International Monetary Fund’s] forecasting that we will grow more than Germany, France, and Italy in the longer term,” he added.
However, Jake Finney, an economist at consultancy giant PwC, said the revisions are“not significant enough to change the overall picture of a flatlining economy.”
“Output is only 0.4 percent higher than where it was at the same time a year ago. If anything, the GDP data revisions may marginally dampen the UK’s growth prospects for 2023 and 2024 as they reduce the potential for bounce-back growth,” he said.
Other European countries, including Italy, Spain, and the Netherlands, have made similar upward revisions to economic output for 2021.
