Overview of UK’s Real GDP
In 2021, UK's real GDP reached $2.8 trillion, up 7.5% year-on-year. UK's economy grew by a CAGR of 1.2% between 2010 and 2021. However, the outlook for UK's economy was clouded due to a spike in COVID-19 cases, rising inflation, and the war between Russia and Ukraine.
Outlook on Global Economy
Real GDP refers to base year prices, which include inflation. Changes in real GDP indicate the increase or decrease in the volume of economic activity and measure economic growth.
The US, China, Japan, Germany, and India are the top five countries in the world in terms of real GDP. In 2021, the US had the most significant real GDP with a value of $18.6 trillion, followed by China. Japan ranked third globally in real GDP during the same period with $6 trillion. Other top economies are Germany and India, with real GDPs of $3.8 trillion and $2.9 trillion.
Factors Affecting the Global Economy
A rise in COVID-19 cases:
As a result of Omicron, a new variant of COVID-19, more cases have been reported worldwide, resulting in the disruption of supply chain management. However, the global vaccination drive has reduced the fatality of the coronavirus.
Russia-Ukraine war:
A prolonged conflict between Russia and Ukraine will continue to affect global economic growth. Investment and trade have been adversely affected due to the war as economic sanctions have been imposed on Russia, and several big companies have stopped their operations in the country.
Rising Inflation and Interest Rates:
The inflation rate in developing and advanced economies have been rising, causing central banks to tighten monetary policy and raise interest rates to control price rises. However, a sustained rise in interest rates could push some economies into financial distress.
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