139/01
11 December 2001
IMF REPORT ON UK ECONOMIC PERFORMANCE
The ?remarkable performance? of the UK economy ?owes much to the government's strong policy framework?, report the International Monetary Fund today. Concluding their recent examination of the UK economy, the IMF say that ?the symmetric inflation targeting framework has enabled the Monetary Policy Committee (MPC) to respond promptly to demand shocks, including the recent global slowdown?, while ?fiscal policy should continue to meet the high standards of prudence and predictability that have characterised it over the last few years.?
Commenting on the projections in last month's PBR, the IMF say that GDP growth at 2-2½% in 2002 ?is only slightly above [the IMF's] central forecast?. Moreover, the ?cyclically-adjusted overall deficits of about 1 percent of GDP over the medium term would not compromise the strong underlying fiscal position achieved in the late 1990s?.
The IMF conclude that ?the budget and pre-budget reports, as well as the frequent consultations between the government and the public, in many respects set an international standard of best practice,? and support ?the strengthening of the UK's anti-money laundering rules, which are considered, in many respects, an international model.?
The IMF endorses many of the structural reforms the government has embarked on to raise growth in the UK, and describe the government's strategy in this area as ?appropriate?. Overall they conclude that ?the track record of sound policy design and implementation in recent years bodes well for continued success in a more uncertain world economy.?
Commenting on the IMF's statement, the Chancellor, Gordon Brown, said:
?I welcome this confirmation from the IMF that our prudent approach to economic policy leaves us better placed to withstand the ups and downs of the world economy. According to the IMF, the UK will grow faster than any other G7 country this year.?
?I also welcome the IMF's support for the structural reform agenda we are pursuing to raise long term economic growth in the UK and improve productivity, which will mean rising living standards for all. As the IMF say, this agenda 'should continue to be pursued vigorously.?
Internal links
NOTES TO EDITORS
1. IMF surveillance of every major country, called an Article IV consultation, is carried out through annual discussions between Fund staff and member governments and central banks. The resulting reports are discussed at the IMF's Executive Board within 3 months of the consultations. As part of the Government's drive to increase transparency, domestically and internationally, we publish the Concluding Statement of the IMF mission just after the mission team complete their work.
2. The IMF's report comes shortly after the OECD, another respected international organisation, also praised the government's management of the UK economy in their 2001 Survey, published on Monday November 26. The OECD noted the UK's robust macroeconomic performance and advised that preserving the gains from building a more stable and predictable framework for macroeconomic policy, offers the best prospect for continuing good economic performance in the present uncertain global environment. This report is available online at
External links
3. Enquiries on the IMF report should be addressed to Stephen Field (020 7270 5196) in the Treasury Press Office.
4. A copy of the IMF's concluding statement is attached.