UK GDP shrinks during the second quarter of 2019

The Gross Domestic Product (GDP) of the United Kingdom registered a contraction of 0.2% between April and June compared to the previous three months, which represents the first quarterly decline since the fourth quarter of 2012, according to the data released this Monday by the National Statistics Office (NSO).

Compared to the same period last year, GDP in the second quarter registered a 1.3% increase, compared to the 2.1% expansion observed in the first quarter of the year.

The statistical office has stressed that “certain components” of the economy were “particularly volatile” this year, reflecting changes in activity related to the original UK exit from the European Union, which was foreseen for last March and was delayed until October.

In this way, the growth of household consumption accelerated to 0.4%, one tenth more than in the previous quarter, while the formation of fixed capital contracted 0.9%, compared to the expansion of nine Tenths recorded between January and March.

On the other hand, they revised the growth of the economy in the first quarter to 0.6%, mainly because during that period the companies increased their stockpile of goods to deal with Brexit.

This September, the Organization for Economic Cooperation and Development (OECD), revised downward the growth forecast of the United Kingdom to 1% in 2019, two tenths less, while for 2020 the estimate was in the 0.9%, one tenth less.

In addition, the institution chaired by Ángel Gurría warned that the country could enter into recession in case it leaves the EU without agreement on October 31. This same possibility was also considered by the firm IHS Markit, after the activity of the manufacturing and construction sector contracted, while that of the services sector stagnated.

K. Tovar

Source: Diario Financiero