Budget 2013 and the OBR’s forecasts – NIESR’s response
The economic outlook
The Office for Budget Responsibility (OBR) has revised down their forecast for economic growth for this year and next year. They now expect growth of 0.6 per cent this year and 1.8 per cent in 2014. Given the headwinds faced by the economy there is a significant risk that economic stagnation will persist through much of the rest of this year. Whether or not a “triple dip” recession is avoided – the OBR assessment, like ours, is that it is touch and go - the OBR are correct with their assessment that is largely irrelevant. In line with NIESR’s latest forecast, the OBR does not expect above-trend economic growth until 2015. In other words, economic recovery is only expected to begin in 2015. Consistent with the latest NIESR forecast, the OBR think the pre-recession GDP peak (2008Q1) will finally be recovered at the start of 2015.
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