Economies around the world were greatly affected by the global financial crisis which began around 2008 and is still being felt by several countries even in Europe. The UK’s GDP, as written about in this article, is growing “faster than expected”. The author of the article has done well to explain what GDP means when introducing the basis of the article. However, there are a number of things that have not been covered by the author in the article. For instance, while mentioning the 1.9% annual GDP growth for the quarter, nothing is mentioned of the projections of the other economic indicators that had been made other than the GDP.
The author takes a positive tone in writing about the growth in the British Economy. While this is a bold and optimistic view, a 0.8% quarter on quarter pace of growth does not help in the achievement of the article’s purpose if people are not told of the previous rates. Readers are interested in information regarding their salaries, income growth, tax rates, and so forth. This means that when the author mentions the government is implementing austerity measures which cut jobs in the public sector, it does not go down well with the audience who are mostly British citizens and expatriates in Britain.
The private sector is leading the way in creation of jobs in the British economy but there are fears in the sector with regards to consumer expenditure. Most Britons are not spending mainly because of understandable reasons; whilst the Office for National Statistics points out that the economy is growing, people’s wages are yet to rise, and many people are still unemployed (Sky News 1). Nonetheless, a robust housing market is expected to bring good tidings with regards to employment and consumer spending.
The other areas in which the economy needs to improve in include exports and business investment. This is according to Howard Archer who is a chief economist at IHS Global Insight. Per Capita income also has to improve.
Presently, living standards in families are stagnant mainly because incomes have not improved for a while. In 2012, for instance, the GDP per capita stood at $37849.57 a drop from $40027.1 in 2007 (Trading Economics 1).
While there are marked improvements seen in economic growth, the risks are still there and people expect better jobs and wages in order to appreciate that the numbers presented by the ONS in terms of the GDP and quarterly growth rates are appreciated in terms of improved living standards realized through growing family income.
Keywords: GDP, GDP Per Capita,
GDP – Gross Domestic Product is the total value of the services and products that a country produces, normally in a year.
GDP Per Capita, PPP – is GDP on the basis of the purchasing power parity. This is the GDP which is converted to international dollars through the purchasing power parity.
Per Capita Income – this is the income per person. It is obtained by averaging the income of all the people in a given country, state or city (any economic unit).
Financial Year – also known as the fiscal year. This is the period spanning 12 consecutive months and starts at any time and is used to calculate annual financial statements in economic units like businesses, corporations, states and countries.
Economic Downturn/Recession – a drop or reduction in success in an economy
Figure 1: Source – World Bank
From the graph showing the GDP growth rate above, it is evident that there was a slump between 2008 and 2010 but things started changing for the best there afterwards with slight decline around 2011/2012. 2013, however, presented the much anticipated growth rate as shown above.
2008 was the worst period in UK Economic history as shown above. However, the slight growth rate promises better tidings moving forward in 2014.
- Sky News. “UK GDP: Economy Growing Faster Than Expected.” 20 December 2013. Sky News. 30 January 2014 http://news.sky.com/story/1185462/uk-gdp-economy-growing-faster-than-expected
- Trading Economics. “UNITED KINGDOM GDP PER CAPITA.” 2013. Trading Economics. 30 January 2014 http://www.tradingeconomics.com/united-kingdom/gdp-per-capita