THE UK is likely to slide in the global rankings to become the seventh-largest economy in 2019, PricewaterhouseCoopers declares in its latest forecasts.
The accountancy firm predicts that India and France will surpass the UK next year.
It cites “subdued” growth in the UK this year and in 2019 as key to its forecast that the country will trail France, noting that India’s climb up the rankings is “likely to be permanent”.
UK growth has been hampered by the country’s decision to leave the European Union.
Bank of England Governor Mark Carney has been among those to highlight the impact of the Brexit vote on business investment. And a surge in inflation in the wake of the Brexit vote, arising from sterling weakness, has weighed heavily on real household incomes.
PwC projects growth of 1.6 per cent for the UK next year. It forecasts expansion of 1.7% in France and growth of 7.6% in India.
Mike Jakeman, senior economist at PwC, said: “India is the fastest-growing large economy in the world, with an enormous population, favourable demographics and high catch-up potential due to low initial GDP (gross domestic product) per head. It is all but certain to continue to rise in the global GDP league table in the coming decades.”
He added: “The UK and France have regularly alternated in having the larger economy, but subdued growth in the UK in 2018 and again in 2019 is likely to tip the balance in France’s favour. The relative strength of the euro against the pound is an important factor here.”
PwC projects US growth will moderate from an estimated 2.8% in 2018 to around 2.3% next year.
And, forecasting a slowdown in growth in China next year, PwC says: “Although the government will try to ensure that the slowdown is minimal, the impact of US tariffs and the need to control debt levels are likely to create a modest deceleration in growth.”
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