LONDON — The International Monetary Fund has raised its growth forecast for the United Kingdom for the first time since the Brexit vote.
In its latest World Economic Outlook, the IMF upgraded its UK economic growth estimate for 2017 to 2%, up from a forecast of 1.5% three months earlier.
The move signals the IMF’s growing confidence that the UK can weather Brexit shocks to the economy in the short-term.
In October, the IMF shaved off 0.2 percentage points from its previous economic forecast for the UK, estimating growth of just 1.1% in 2017.
“The 0.9 percentage point upward revision to the 2017 forecast and the 0.2 percentage point downward revision to the 2018 forecast reflect the stronger-than-expected performance of the UK economy since the June Brexit vote, which points to a more gradual materialisation than previously anticipated of the negative effects of the United Kingdom’s decision to leave the European Union,” the IMF said.
The group also raised its global growth forecast but warned that medium and long-term risks still threatened stability.
“With buoyant financial markets and a long-awaited cyclical recovery in manufacturing and trade, world growth is projected to rise from 3.1% in 2016 to 3.5% in 2017 and 3.6% in 2018,” the IMF said.
“But structural impediments to a stronger recovery and a balance of risks that remains tilted to the downside, especially over the medium term, remain important challenges.”
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