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-Top News Bangladesh Economy

Bangladesh Growth Revised Down By World Bank

The global lender has forecast a 4 percent growth for Bangladesh’s gross domestic product (GDP) in the current fiscal year — down from 5.2 per cent forecast earlier, reports Asian Lite News

The World Bank has lowered its 2024-25 fiscal year (July 2024-June 2025) economic growth outlook for Bangladesh mainly due to the South Asian country’s political instability.

The global lender in a report titled “South Asia Development Update for October 2024” released on Thursday has forecast a 4 percent growth for Bangladesh’s gross domestic product (GDP) in the current fiscal year — down from 5.2 per cent forecast earlier.

This major reduction in growth comes after significant uncertainties around the political and economic outlook following the July-August political turmoil, Xinhua news agency reported.

Chief Advisor of Bangladesh Muhammad Yunus with World Bank President Ajay Banga.

In the medium to long term, the lender expects growth to gradually recover, supported by key reforms in the financial sector, increased domestic resource mobilization, improved business climate, and expanded trade.

For fiscal 2025-26, the bank forecasts Bangladesh’s economy to grow by 5.5 per cent.

Bangladesh and the Maldives are the two of the South Asian countries for which the global lender has downgraded growth projections.

The revision for Bangladesh also comes weeks after the Asian Development Bank (ADB) lowered its growth forecast for Bangladesh to 5.1 per cent for the current fiscal year, citing supply chain disruptions caused by political unrest in July and August.

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-Top News Arab News Saudi Arabia

Saudi GDP Slips

The fall is mainly due to an 8.9-per cent year-on-year drop in oil activities during the period….reports Asian Lite News

Saudi Arabia announced on Sunday a 0.3-per cent year-on-year decrease in real gross domestic product (GDP) for the second quarter of 2024, mainly due to an 8.9-per cent year-on-year drop in oil activities during the period.

The findings were part of a report released by the country’s General Authority for Statistics, which also showed that the kingdom’s seasonally adjusted real GDP grew by 1.4 per cent compared to the previous quarter.

According to the report, non-oil activities continued their upward trend, expanding by 4.9 per cent year-on-year, while government activities rose by 3.6 per cent year-on-year, Xinhua news agency reported.

In particular, electricity, gas and water activities achieved the highest growth rate in the second quarter, hitting 8.9 per cent year-on-year, the report showed.

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-Top News EU News Europe

Eurozone GDP up 0.3% in Q2

In the first quarter of 2024, GDP had also grown by 0.3 per cent in both regions, the statistical office of the EU reported on Tuesday…reports Asian Lite News

Seasonally adjusted GDP increased by 0.3 per cent in both the eurozone and the European Union (EU) area in the second quarter of 2024, compared with the previous quarter, according to preliminary data released by Eurostat.

In the first quarter of 2024, GDP had also grown by 0.3 per cent in both regions, the statistical office of the EU reported on Tuesday.

Germany’s output contracted by 0.1 per cent in the second quarter, according to Eurostat data. France and Spain experienced growth of 0.3 per cent and 0.8 per cent, respectively. The highest growth rate was recorded in Ireland, with a 1.2 per cent increase in the second quarter.

Conversely, Latvia experienced a notable decline of -1.1 per cent, with Sweden and Hungary also reporting negative growth.

Bert Colijn, a senior economist at ING, remarked that although the Eurozone economy grew faster than expected in the second quarter, the recovery remains cautious, supported by low unemployment and reduced inflation. Colijn also said that there are no signs of further acceleration in the Eurozone’s economic growth.

“The differences within the eurozone remain striking,” Colijn said, noting that Spain continues to be the eurozone’s growth engine, while France also looked healthier than expected in the second quarter, although this was mainly due to one-off export effects.

“Germany remains the weak link in this post-pandemic economy, and the overall performance is lacklustre without Spain’s contribution,” he added.

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-Top News China Economy

China’s Q2 GDP growth misses expectations

China’s National Bureau of Statistics noted that adverse weather contributed to the slowdown in second-quarter growth. It also highlighted growing external uncertainties and domestic challenges expected in the latter half of the year…reports Asian Lite News

China’s National Bureau of Statistics reported on Monday that the country’s GDP in the second quarter grew by 4.7 per cent compared to the previous year, which was below expectations of a 5.1 per cent increase.

This growth rate marked a slowdown from the 5.3 per cent growth observed in the first quarter. Additionally, June’s retail sales saw an increase of 2 per cent, falling short of the expected 3.3 per cent growth.

“By quarter, the GDP for the first quarter increased by 5.3 per cent year on year and for the second quarter 4.7 per cent. The GDP for the second quarter increased by 0.7 per cent quarter on quarter,” the statement said.

China’s National Bureau of Statistics noted that adverse weather contributed to the slowdown in second-quarter growth. It also highlighted growing external uncertainties and domestic challenges expected in the latter half of the year.

The economic landscape in China has shown disparities, with industrial output surpassing domestic consumption. This has heightened deflation concerns amid a downturn in the property sector and increasing local government debt. Despite resilient Chinese exports offering some stability, escalating trade tensions now pose a significant risk.

The statistics were released as Beijing aims to bolster economic optimism during the eagerly awaited third plenum, a crucial leadership gathering beginning Monday. However, conflicting goals, such as the need to stimulate growth while reducing debt, present challenges to these efforts.

China has been experiencing a shift from high-speed growth to a more moderate pace in recent years. The GDP growth rate for 2023 was around 5.5 per cent, down from previous double-digit growth rates seen in earlier decades. The shift in China’s economic growth from high-speed to more moderate levels in recent years can be attributed to several interrelated factors.

According to the World Bank, China has been undergoing a shift from an investment-driven growth model to one that emphasises consumption and services. Investment in infrastructure and heavy industries, which previously drove rapid expansion, has slowed as the economy matures.

Moreover, China’s demographic dividend, which provided a large and youthful workforce, is diminishing as the population ages.

An ageing population reduces the labour force participation rate and limits the potential for rapid economic expansion. According to the Council on Foreign Relations, escalating trade tensions with the United States and other major economies have weighed on China’s export sector and overall economic confidence.

Tariffs and trade barriers have disrupted supply chains and reduced global demand for Chinese goods. China faces significant environmental challenges stemming from decades of rapid industrialization.

Efforts to curb pollution and promote green development, while crucial for long-term sustainability, have also impacted industrial output and economic growth rates. According to the China Economic Review, the transition to a more innovation-driven economy requires time and resources, which may temporarily affect overall GDP growth rates. (ANI)

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-Top News UAE News

CBUAE projects UAE’s GDP growth to reach 6.2%

Boosting its status as a global travel and tourism hub, Dubai approved an ambitious AED128 billion project for a new passenger terminal at Al Maktoum International Airport…reports Asian Lite News

The real estate, tourism and hospitality sector, and transportation sectors collectively represent around 30 per cent of the non-oil GDP, the report highlighted.

The number of residential real estate sales transactions in Abu Dhabi in January-April 2024 was estimated to have increased by 7.7 per cent YoY. Growth was mostly driven by the sales of ready units, which increased by 24.9 per cent YoY, while off-plan sales increased marginally by 0.8 per cent YoY.

Data for Q1 2024 indicated that Dubai sustained its role as a top international tourism hub. The emirate’s hotel occupancy rates stood at 83 per cent, equal to the previous year’s figures, while the average duration of stay per visitor was almost unchanged at 3.9 nights, yet there was a 2 per cent YoY increase in the total occupied room nights, totalling 11.2 nights.

Furthermore, Dubai recorded an 11 per cent rise in tourist arrivals in the first three months of 2024 compared to the same period last year, taking advantage of the revival of worldwide travel demand. During this period, the emirate welcomed 5.2 million international overnight visitors, an increase from 4.7 million tourists in the first quarter of the previous year.

Zayed International Airport welcomed over 6.8 million passengers in the first quarter of 2024, taking advantage of the top-tier facilities and services at its newly opened terminal in Abu Dhabi. This emphasises Abu Dhabi’s status as a major transportation hub, with a 36 per cent increase in passenger numbers compared to the first quarter of 2023.

Dubai International Airport had an exceptional start in 2024, recording its busiest quarter ever, which highlights its importance as a global aviation hub and a major contributor to Dubai’s economy. During the first quarter, there was a remarkable increase in passenger traffic, with 23 million travellers passing through its facilities. This represents an 8.4 per cent rise compared to the same period last year, emphasising its strong connection to key global markets and its role in strengthening Dubai’s status as a prime destination for both tourism and business.

Boosting its status as a global travel and tourism hub, Dubai approved an ambitious AED128 billion project for a new passenger terminal at Al Maktoum International Airport. This expansion will increase the size of Dubai’s main international airport five times, to become the largest in the world by size and capacity, capable of handling up to 260 million passengers annually. (ANI/WAM)

ALSO READ-UAE Finance Ministry launches new transformational projects

Categories
-Top News Business Economy

How India Plans to Outpace China?

If we look at the economic growth, India’s GDP growth has been exceeding China’s for a few years now…reports Asian Lite News

A robust gross domestic product (GDP) growth, continuous thrust on manufacturing with global giants (like Apple) strengthening their local supply chains, top American corporate honchos praising the overall development under Prime Minister Narendra Modi, and political stability ensure that India is in a position to pip China on most economic parameters faster than expected.

If we look at the economic growth, India’s GDP growth has been exceeding China’s for a few years now.

While India clocked GDP growth at around 7.5 per cent in 2023, China’s growth hovered around 5 per cent. For the first quarter (Q1) this year, China’s GDP grew 5.3 per cent. On a quarter-on-quarter basis, it grew a mere 1.6 per cent.

The International Monetary Fund (IMF) has pegged India’s growth projection to 6.8 per cent this year, an increase of 0.3 per cent over its January update, while China’s GDP growth has been pegged at 4.6 per cent in 2024 and is expected to slow down further to 4.1 per cent in 2025.

The IMF even projects China’s growth declining towards 3.5 per cent in 2028 and estimates that by 2027, India will become the world’s third-largest economy, after the US and China.

On Thursday, Finance Minister Nirmala Sitharaman said that PM Modi’s government will be formed again for a third term and India’s economy will reach third place globally (behind the US and China) from fifth place in the coming year or so – faster than what is being projected. According to the government’s Chief Economic Adviser (CEA) V. Anantha Nageswaran, there is a high possibility of India’s economic growth even touching 8 per cent in 2023-24.

RBI Governor Shaktikanta Das said recently that India’s GDP growth for 2024-25 is projected at 7 per cent – way ahead than China’s growth which is faltering.

India, China military-level talks end on positive trajectory.

The world has also acknowledged India’s growing economic clout.

JPMorgan Chase CEO Jamie Dimon recently praised PM Modi for having “done an unbelievable job” and billionaire investor Warren Buffett said that India holds “unexplored” opportunities for Berkshire Hathaway. Apple CEO Tim Cook called the country “an incredibly exciting market while Tesla and SpaceX CEO Elon Musk look forward to visiting India later this year.

According to IMF data, India’s per capita GDP in 2024 has increased to $2,850 which works out to 42 per cent of the $6,770 for its peer countries. It means that the gap has been narrowed, with India’s economic performance being better than the other emerging economies in the last 10 years.

A decade ago, India was the 10th largest economy, with a GDP of $1.9 trillion.

“This 10-year journey is marked by several reforms, both substantive and incremental, which have significantly contributed to the country’s economic progress,” according to the government.

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Economy UK News

UK to boost defence spending to 2.5% of GDP

Last month, Sunak faced calls from three former defence secretaries to pledge an increase to 3% of GDP on the armed forces in the Tory election manifesto…reports Asian Lite News

Britain will boost its defence spending to 2.5% of national output by the end of the decade, Rishi Sunak has announced on a visit to Poland, as he warned the UK had to be equipped to meet the challenges of an increasingly dangerous world.

The prime minister’s plan, under which the UK would steadily increase defence spending to £87bn a year by 2030, comes after months of pressure from Tory MPs, including the defence secretary, Grant Shapps, to increase military spending to help counter the threat from Russia.

The military commitment, described by Sunak as the “biggest strengthening of our national defence in a generation”, means the UK would spend a cumulative extra £75bn on core defence funding over the next six years.

In a speech alongside the Nato secretary general, Jens Stoltenberg, in Warsaw, Sunak said Europe was at a turning point as he urged allies to step up to match the commitment of the UK, which will become the second largest contributor to Nato after the United States.

“In a world that is the most dangerous it has been since the end of the cold war, we cannot be complacent. As our adversaries align, we must do more to defend our country, our interests, and our values,” he said.

“Today is a turning point for European security and a landmark moment in the defence of the United Kingdom. It is a generational investment in British security and British prosperity, which makes us safer at home and stronger abroad.”

Downing Street said the plan was fully funded, moving from an aspiration to spend 2.5% by an unspecified date, when the economic circumstances allowed, to a costed commitment to do so in 2030. The UK currently spends 2.32% of gross domestic product on defence.

It is unclear whether an incoming Labour government would stick to Sunak’s commitment. Keir Starmer said last week that Labour would aim to raise the UK’s defence spending to 2.5% of GDP “as soon as resources allow” if it won the election.

Boris Johnson pledged at a Nato summit in June 2022 to increase UK military spending to 2.5% of gross domestic product by the end of the decade as part of a strengthening of Nato defences in response to the threat from Russia.

Last month, Sunak faced calls from three former defence secretaries – Michael Fallon, Gavin Williamson and Ben Wallace – to pledge an increase to 3% of GDP on the armed forces in the Tory election manifesto.

Government sources said the funding would be used to put the UK’s defence industry on “a war footing” and deliver cutting-edge technology to equip the west to stand up to autocratic states such as Russia, Iran and China, which were working together to undermine democracies.

It includes an additional £10bn over the next decade on munitions production, further pledges to reform defence procurement and the creation of a new defence innovation agency with at least 5% of the defence budget to be committed to R&D.

It would also cover an additional £500m in military funding for Ukraine from Treasury reserves, which was announced by Sunak before the trip and takes the total to £3bn this financial year.

Earlier, the prime minister appointed Gen Gwyn Jenkins, a former special forces commander who is vice-chief of the defence staff, as his new national security adviser.

He will be the first armed forces veteran to serve in the role and replaces Tim Barrow, who is expected to become the next UK ambassador to Washington at the end of this year.

Labour, however, has warned it could reverse Barrow’s appointment if it wins the election, arguing that the next UK government should make decision over who takes on Britain’s most senior diplomatic posting.

The chancellor, Jeremy Hunt, also on the trip with Sunak and Shapps, said: “It speaks to Britain’s global role that, with an improving economy, we are able to make this commitment to peace and security in Europe.

“It also sends the clearest possible message to Putin that as other Nato European countries match this commitment, which they will, he will never be able to outspend countries that believe in freedom and democracy.”

Earlier, on the flight to Poland, Sunak said: “It’s important that we continue to support Ukraine and the UK has always led in that. Again we’re stepping up because that is what the situation demands and requires.

The prime minister welcomed the decision by the US House of Representatives, after months of stalling, to finally approve a US $61bn package of new military aid for Ukraine.

But he added: “That doesn’t take away from the need for Europeans to invest in their security. I am very proud that the UK has always led in that regard.”

Sunak, who will visit Germany later on his first visit as prime minister, is expected to be asked for assurances on British defence spending from the German chancellor, Olaf Scholz, after decades of real-terms cuts.

Berlin is expected to finally meet its Nato target to spend 2% of GDP on defence after Russia’s invasion of Ukraine, with Germany’s weapons commitments to the war now almost twice the size of Britain’s, and Scholz regularly urging European states to ramp up their military spending.

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Business Economy India News

India’s Earnings-to-GDP Ratio Rebounds Since FY20

On aggregate, net earnings were 4 per cent higher than street expectations…reports Asian Lite News

The corporate earnings momentum has improved significantly since FY20.

Earnings have surprised on the upside in the recent past, driven by an improvement in margins, foreign brokerage Nomura said in a research report.

“We think, from hereon, margin levers are limited and growth will be largely dependent on volume growth,” it said.

“We are constructive on earnings growth in the medium term supported by government policies and its impact on macro factors. The earnings-to-GDP ratio can continue to improve,” it added.

The corporate earnings-to-GDP ratio, which has recorded a consistent decline since the Global Financial Crisis (GFC), has rebounded since FY20. Most segments, particularly the commodity-consuming manufacturing sector, have recorded strong growth since FY20, Nomura said.

In an analysis of a set of 232 companies (referred as BSE 200+), which are part of the BSE 200 index and coverage universe, net earnings recorded 30 per cent y-o-y earnings growth.

Excluding financials, commodities and telecom, where earnings tend to be volatile, the aggregate earnings growth was strong at 22 per cent y-o-y. The earnings momentum has improved in the recent past as the four-year CAGR between 3QFY20-24 is at 32.3 per cent, vs 2.9 per cent between 3QFY16-20.

On aggregate, net earnings were 4 per cent higher than street expectations, the research said.

The year-on-year growth was particularly strong in cement, autos, and infrastructure/transport/logistics (including airline). The growth was muted in IT services and consumer staples, but on aggregate the earnings were ahead of consensus estimates.

The market expects the Nifty 100 index to record 28.4 per cent earnings growth in FY24E aided by strong profits in the oil and gas sector and financials.

For FY25E and FY26E, earnings growth expectations are modest at 12.1 per cent and 13.3 per cent y-o-y, respectively.

Financials will contribute 38 per cent to the incremental earnings of the Nifty 100 over FY24-26E, as per consensus estimates. Earnings growth is expected to moderate across most sectors over the next two years vs FY24 owing to a high base, the research said.

The growth will be driven by increase in volumes as margin levers have already played out. Slowdown in economic growth and higher commodity prices are the key risks to the market’s current earnings estimates.

“We think capex, along with domestic manufacturing, will lay the foundation for earnings growth in the medium term,” the report said.

India Dedicated Funds Continue 49-Week Inflow Streak

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India dedicated funds have now seen the 49th straight week of inflows, Elara Securities said in a report.

The inflows include $712 million this week after $766 million in the previous week. Largecap funds continued to see the biggest portion of this flows ($631 million).

Some revival is also seen in smallcap funds where a total $280 million has come in the past nine months. India flows continue to be strongest from US investors ($215 million), followed by Ireland ($177 million) and Japan ($124 million) investors, the report said.

Countries where both domestic and foreign inflows are strong include the US, Japan and India, the tracker said.

On the other hand, China is witnessing strong domestic inflows, but foreign flows are still weak. Over the past month, the pace of inflows by domestic investors into Chinese equity was strongest since 2015.

Overall, the global liquidity situation continues to remain benign with most markets witnessing strong domestic flows, it added.

“China funds have started showing strong outperformance over India funds, finally. Similar outperformance was seen in May 2022 after which we saw a round chasing into this trade. Likewise, the second big leg was from November 2022 to February 2023 with an outperformance of 40 per cent,” the report said.

With the strong domestic flows and beginning of outperformance, it will be key to see if foreign flows start shifting there, though there is no signs of this trade as of now, the report said.

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Categories
-Top News Africa News

‘Climate change to slash Africa’s GDP by 7.1%’

In Africa, more than 200 million people could face extreme hunger and undernourishment in the long run as extreme weather events impact crop yields and farmland value…reports Asian Lite News

Extreme weather conditions are expected to have severe repercussions on the economy, agricultural productivity, water resources, and energy security across the developing world, a new study has found.

Published by the Center for Global Development (CGD), the report looks at the socioeconomic impact of rising temperatures and rapidly shifting weather patterns and extreme events in the Global South and particularly in Africa in the coming decades. According to the analysis, even small temperature increases – much lower than 2C – could have significant repercussions on socioeconomic indicators in the developing world.

In Africa, more than 200 million people could face extreme hunger and undernourishment in the long run as extreme weather events impact crop yields and farmland value. Indeed, agricultural production in Africa could experience losses of up to 2.9% by 2030 and 18% by mid-century, the study suggested, while the value of farmland to drop anywhere between 36% and 61%. While estimates are not conclusive for other developing regions, researchers say rain-fed crops will suffer the most.

Besides food security, climate change is also expected to deepen poverty in the world’s poorest regions. In Africa, the average per capita gross domestic product (GDP) is projected to drop by 7.1% in the long term, while country-level losses are much higher, estimated between 11.2% and 26.6% of GDP. Across the continent, poverty is expected to affect households that work in the agricultural sector the most, with revenue from crops likely to drop by 30% and poverty expected to rise anywhere between 20% and 30% when compared to a no-climate-change scenario.

As altered rainfall patterns impact the quality and spatial distribution of global water resources, regions vulnerable to droughts and flooding are also expected to see increased displacement rates and water shortages. In Africa alone, these changes are likely going to push more than 50 million people into water distress.

“If the menace of climate change is not addressed, the socioeconomic problems of developing countries, particularly in Africa, will deepen and erode the gains made in development in the last decades,” wrote Philip Kofi Adom, the study’s author.

The analysis follows months of record-breaking temperatures worldwide, with 2023 dubbed the hottest year in history and characterised by unprecedented extreme weather events that have brought about loss and devastation around the world.

Developing countries, historically the ones most affected by these events despite being those contributing the least to the issue, have long fought to hold industrial nations accountable. At last year’s UN COP28 climate summit in Dubai, delegates from nearly 200 countries approved a framework for the Loss and Damage Fund instituted at COP27 to help developing countries deal with the harm stoked by global warming. The framework, brought forward last month by the 24-member Transitional Committee (TC), a board tasked with the operationalisation of the fund, contains recommendations on how the fund would operate, including who would get the money, and who would pay.

The final text invites “financial contributions with developed country parties continuing to take this lead to provide financial resources for commencing the operationalisation of the Fund.” It also assures the World Bank as the fund’s host on a four-year interim basis – despite the US pushing to make this permanent. Developing nations initially expressed opposition to the idea of the Bank hosting the Fund due to their lack of confidence in the institution’s significant shift towards promoting climate action.

Pledges for the fund exceeded US$700 million, including $300-400 million from the European Union (EU) collectively, $100 from the United Arab Emirates (UAE), $50 million from the UK, $17.5 million from the US, and $10 million from Japan.

Nevertheless, critics pointed out that contributions to the Fund represent less than 0.2% of the economic and non-economic losses developing countries face every year from global warming, adding pressure to developed nations to enhance their contributions and provide additional pledges in line with their historical responsibility for loss and damage.

February on course to break many global heat records

February is on course to break a record number of heat records, meteorologists say, as human-made global heating and the natural El Nino climate pattern drive up temperatures on land and oceans around the world, media reported.

A little over halfway into the shortest month of the year, the heating spike has become so pronounced that climate charts are entering new territory, particularly for sea-surface temperatures that have persisted and accelerated to the point where expert observers are struggling to explain how the change is happening, The Guardian reported.

“The planet is warming at an accelerating rate. We are seeing rapid temperature increases in the ocean, the climate’s largest reservoir of heat,” said Dr Joel Hirschi, the associate head of marine systems modelling at the UK National Oceanography Centre. “The amplitude by which previous sea surface temperatures records were beaten in 2023 and now 2024 exceed expectations, though understanding why this is, is the subject of ongoing research.”

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-Top News UK News

UK Slides into Recession Ahead of General Election, GDP Shrinks

A recession is commonly defined as two consecutive quarters of contraction…reports Asian Lite News

The UK has slipped into recession just months ahead of a general election, official figures showed on Thursday, derailing Prime Minister Rishi Sunak’s pledge to generate economic growth, the media reported.

The GDP fell 0.3 per cent in the final three months of 2023, following a 0.1 per cent contraction in the July to September period, the Office for National Statistics (ONS) said.

A recession is commonly defined as two consecutive quarters of contraction.

“All the main sectors fell on the quarter, with manufacturing, construction and wholesale being the biggest drags on growth, partially offset by increases in hotels and rentals of vehicles and machinery,” ONS director of economic statistics Liz McKeown said in a statement, CNN reported.

The ONS estimates that the UK’s GDP increased by a meagre 0.1 per cent in 2023. That’s the worst performance since 2009 when the economy was still reeling from the global financial crisis, if 2020, which was affected by the pandemic, is excluded.

Last year’s weak rise in output follows growth of 4.3 per cent in 2022.

“Across 2023 as a whole the economy has been broadly flat,” McKeown added.

The news will come as a disappointment to Sunak, whose ruling Conservative Party is contesting two local elections in England on Thursday.

It could also widen the already commanding lead the Opposition Labour Party enjoys in opinion polls ahead of the national election expected this year, CNN reported.

“Though the shallowness of this recession provides comfort, these figures also confirm that our economy remained locked in a cycle of persistent stagnation throughout 2023,” said Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales.

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