Growth forecast downgrades should come as no surprise these days, but when they come from the IMF they naturally command a fair bit of attention. In fact, the IMF’s downgrades for annual GDP change — to -0.4 per cent in 2012 (from +0.2) and +1.1 per cent in 2013 (from +1.4) — simply bring them into line with the consensus. The below graph shows how the average of independent forecasts for 2012 growth has changed over the last few months:
Given that the ONS shows the economy having contracted by 0.7 per cent in the first half of this year, the IMF’s forecast of a 0.4 per cent contraction for the whole of 2012 implies slight growth of about 0.2 per cent in the second half.
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