United Kingdom’s Gdp Growth

ECONOMIC OVERVIEW

GROSS DOMESTIC PRODUCT

(All data have been collated from The World Bank Data)

United Kingdom’s GDP Growth from 2001 to 2014 - £ 1067 B to £ 1816 B around 70% growth across the period. From the below plot we can understand how the GDP has grown at an average of 2-3% throughout the years and falling below 4% during the Recession of 2008-09. [pic 1]

The Expenditure method of GDP where the components as a percentage of GDP have been represented below. 

[pic 2]

Y= C + G + I + NX---   Y is the overall GDP; C – Household Consumption G- Government Expenditure ;               I – Investments(Gross Capital) and NX – Net Exports

From the above we can observe that,

1. Trade balance in the United Kingdom is negative. Thus, UK is always having more Net Imports than Exports. During the recession period there is a significant increase in the Net Imports.  The trade balance seems to be declining and is continuously on the fall. The declining trade deficits are mainly due to increase in demand of consumer goods, decline in manufacturing, appreciation of the GBP and deterioration in oil and gas production.         As on date, the Exports have jumped reducing the trade deficit to the five year low mark. (Info taken from Trading Economics of UK)
2. The UK economy has been stable with the rising GDP the household consumption and the Government expenditure has been progressing proportionately. There is not much of an upheaval even during the recession period where the GDP growth has been negative.
3. The UK economy is majorly dependent on advanced manufacturing industries such as aerospace, automotive and life-spaces. Apart from the above, the focus on Energy and construction and Knowledge intensive Trade services is also one of the leading factors for stable economy.

[pic 3]

        The above graph represents the GDP deflator vs the consumer price index

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