UK economy growing slowly
The UK economy could outperform many analysts’ expectations this year, according to a report by Business Monitor International (BMI).
In its newly published United Kingdom Freight Transport Report 2011, BMI acknowledges the scale of the debt problems confronting policymakers as the UK seeks to emerge from recession. “Prospects for the freight transport sector in 2011 will be affected by this weak recovery scenario,” BMI said in the report.
The Conservative-Liberal Democrat coalition government's pursuit of austerity and fiscal reform should leave the UK in a better position than a number of other European governments. But the report suggests that further quantitative easing may be necessary to push the pound lower and help exports.
“We estimate 2010 GDP growth of 1 percent after a 4.7 percent contraction in recession-dominated 2009,” BMI said. “Our outlook for 2011 is for a moderate recovery to continue despite the 'double dip' slowdown across Europe, with UK growth accelerating to 2.3 percent and then moving up slowly to 2.6 percent in 2012. In the five years to 2015, we expect growth to average 2.6 percent a year, implying that the UK will return to a reasonably steady rate of expansion, bearing in mind the overhang of structural and debt problems inherited from the 2009 crisis.”
After a slump in UK air cargo volume, which dropped by 1.3 percent in 2008 and 10.6 percent in 2009, a partial recovery was seen last year. Growth was estimated at 6.4 percent. BMI predicts that the recovery will “lose vigor” in 2011, with growth of 2 percent to 2.34 million tonnes.
“Pre-2008 airfreight volumes will be reached again only in 2013. Over the next five years, we expect annual average air cargo volume growth will be 2.1 percent a year, lagging GDP growth a little,” the report said.
UK foreign trade slowed by 7.3 percent in real terms in 2009, recovered in 2010 with an estimated growth of 1.8 percent, and is forecast to expand again at 4.2 percent in 2011.
“Looking ahead, trade will experience moderate growth in the five years to 2015 (+4.9 percent per annum). We are expecting imports to total $669 billion in 2011, with exports trailing a little behind at $607 billion,” BMI said. “The UK will therefore continue to register its habitual trade deficit. In the period to 2015, average import growth in real terms will be 4.8 percent per annum, with exports growing at 5.1 percent.”