International Finance

UK economy contracts 1.5% in the first quarter of 2021

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UK’s economy contracted by 1.5 percent during the first quarter of 2021 as the country was in a state of lockdown to combat the spread of the Covid-19 virus, according to the Office for National Statistics. The agency also stated that the economy grew by 2.1 percent in March.

The statistics agency further revealed that exports to the European Union picked up in March and are now almost back to where they were in December. It is worth mentioning that the new free trade deal between a post-Brexit Britain and the EU came into force at the start of 2021.

The United Nations (UN) recently revised its global economic forecast upward to 5.4 percent growth for 2021. However, the UN also issued a warning that rapidly increasing Covid-19 cases in some countries and the unavailability of vaccines in many countries threaten a broad-based recovery.

Lead author Hamid Rashid, chief of the Global Economic Monitoring Branch in the UN Department of Economic and Social Affairs, said during a news conference that Europe’s outlook is not as bright as we expected because of signs of second and third waves of Covid-19 infections.

He said, “The key challenge we face in the world right now is that infections are still rising in many parts of the world, and we are seeing new variants and new mutations affecting large populations in South Asia, also in Latin America. That poses a significant challenge in terms of the recovery and world economic growth. Vaccination is probably right now the number one issue to put the world economy on a steady path of recovery.”

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