Britain yesterday slashed its economic growth forecast for next year to 2.6 percent and cut its public borrowing estimate to £155 billion (US$227.8 billion), according to official data on behalf of the new government.
The growth figure, published by an independent fiscal watchdog set up by British Prime Minister David Cameron’s coalition administration, compared with the 3.25 percent expansion that had been forecast by the previous government.
The Office for Budget Responsibility (OBR) added in a statement that British GDP was expected to grow by 1.3 percent this year, which marked a slight upward revision.
The state borrowing forecast compared with the previous estimate of £163 billion for the current financial year, which covers the 12 months to April next year.
The new forecasts were published ahead of an emergency budget on Tuesday next week due from British Chancellor of the Exchequer George Osborne.
Osborne’s emergency budget is expected to unveil deep spending cuts and large taxation rises, as the coalition seeks to slash a public deficit that hit a record £156 billion in the last fiscal year.
The OBR also forecast that GDP would expand by 2.8 percent in 2012, followed by growth of 2.8 percent and 2.6 percent in 2013 and 2014 respectively.
The new forecasts do not include the impact of measures recently introduced by Cameron’s Conservative-Liberal Democrat government, which last month ousted the previous Labour administration that was led by former British prime minister Gordon Brown.
The coalition already axed £6.25 billion of “wasteful” public sector spending last month as it sought to cut the deficit.
At the same time, Osborne set up the independent OBR to publish the government’s official economic forecasts.
In related news, Italy’s public debt, one of the highest in the world, reached a record 1.812 trillion euros (US$2.219 trillion) in April, the Bank of Italy said yesterday.
The figure was a 0.8 percent rise on the March level of 1.797 trillion euros, the central bank said, without indicating the percentage of GDP that the figure represents.
Last year, public debt reached 115.8 percent of GDP, and it is forecast to rise to 118.4 percent this year.
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