The real GDP of the United Kingdom will decline by 35 percent in the second quarter of 2020 due to the COVID-19 pandemic but will bounce back quickly following the removal of lockdown restrictions, according to the forecast published by the Office for Budget Responsibility (OBR)
LONDON (Pakistan Point News / Sputnik - 14th April, 2020) The real GDP of the United Kingdom will decline by 35 percent in the second quarter of 2020 due to the COVID-19 pandemic but will bounce back quickly following the removal of lockdown restrictions, according to the forecast published by the Office for Budget Responsibility (OBR).
According to the OBR, the pandemic itself and quarantine-related restrictions introduced on March 23 in the country will have a sharp impact on the economy, but this effect will be temporary. All calculations are based on the assumption that the lockdown in the UK will last for three months.
"Real GDP falls 35 per cent in the second quarter, but bounces back quickly. Unemployment rises by more than 2 million to 10 per cent in the second quarter, but then declines more slowly than GDP recovers," the forecast read.
The future potential economic growth will depend on the duration of the economic crisis due to suspended investments, rising unemployment and disruptions in the economy, the OBR added.
As a result of the economic outage, as well as the allocation of huge funds from the budget to support businesses and the public sector, the UK budget deficit could reach 273 billion Pounds ($340 billion) in the 2020-2021 fiscal year.
UK Foreign Secretary Dominic Raab, who is currently standing in for Prime Minister Boris Johnson as he recovers from COVID-19, will reportedly announce on Thursday the prolongation of the lockdown measures to curb the spread of the disease until at least May 7.
The number of COVID-19 cases in the United Kingdom nears 100,000, and over 12,000 patients have died of the disease.
