The United Kingdom is expected to be the only G7 country to fall into recession in 2023, according to the latest estimates of the International Monetary Fund. Annual GDP is set to contract some 0.6 percent in the coming year, predominantly due to higher taxes, rising interest rates and the high cost of energy as well as lower government spending.
The UK’s outlook has worsened since the IMF estimated a 2023 growth of 0.3 percent last October. Its prospects are now worse than those of sanction-hit Russia. The IMF’s latest World Economic Outlook does predict, however, that the UK’s output will grow by 0.9 percent in 2024.
As our chart shows, the other G7 member states are expected to see growth, even if only marginally, with Japan taking the lead with a 1.8 percent increase, followed by Canada (1.5 percent) and the United States (1.4 percent).