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Britain halves 2013 economic growth forecast to 0.6%

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(Globalpost/GlobalPost)

Britain on Wednesday halved its economic growth forecast for 2013, blaming the ongoing impact of the eurozone debt crisis, finance minister George Osborne revealed in his annual budget.

Gross domestic product (GDP) was expected to grow by just 0.6 percent this year, half the previous forecast of 1.2 percent, according to estimates issued by the Office for Budget Responsibility (OBR).

"The problems in Cyprus this week are further evidence that the crisis is not over and the situation remains very worrying," he told lawmakers in his annual statement on the coalition government's tax and spending plans.

"Another bout of economic storms in the eurozone would hit Britain's economic fortunes hard. Forty percent of all we export... (is) to the eurozone."

He added: "We are still very exposed to what happens on the continent."

British economic growth guidance for 2014 was cut to 1.8 percent from the previous estimate of 2.0 percent that was given in December.

The economy was then expected to grow by 2.3 percent in 2015, 2.7 percent in 2016 and 2.8 percent in 2017. These estimates were unchanged from previous figures.

Osborne added that Britain was on course to avoid sinking into a so-called triple-dip recession, despite contracting by 0.3 percent in the final three months of 2012.

"Despite the recession in the eurozone, the OBR's central forecast today is that we avoid a second quarter of negative growth here in the UK," said Osborne.

The technical definition of a recession is two successive quarters of contraction.

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http://www.globalpost.com/dispatch/news/afp/130320/britain-halves-2013-economic-growth-forecast-06-0