Vaccine Effectiveness... Will UK Growth Rate Surpass US?

Photo by Reuters

[Asia Economy Reporter Yujin Cho] The UK is expected to surpass the US in economic growth rate this year due to the effectiveness of its vaccination program.

Goldman Sachs forecasted on the 25th (local time) that the UK's Gross Domestic Product (GDP) growth rate this year will reach 7.8%, surpassing the US at 6.8%. This is higher than the previous forecast of the International Monetary Fund (IMF) for the UK's GDP growth rate, which was 5.3%.

The IMF had previously analyzed that the UK suffered a larger economic contraction of 10% last year due to failures in COVID-19 containment and nationwide prolonged lockdowns, compared to the US's 3.5% contraction.

Goldman Sachs had anticipated in February that the US GDP would reach 6.8% this year, driven by President Joe Biden's large-scale economic stimulus plan.

The key driver behind the UK's rapid economic recovery is the vaccine rollout. As the spread of COVID-19 has been controlled and vaccination rates have accelerated, economic activities are reviving.

The UK, which was the first country in the world to start vaccinations, currently has over half of its total population having received at least one dose, leading some to analyze that the UK has reached herd immunity.

Various indicators are also showing positive signs. Goldman Sachs stated, "The UK economy is showing a rapid recovery from the COVID-19 crisis," adding, "The UK Purchasing Managers' Index in April was higher than expected, and retail sales in March increased by 5.4%, showing a stronger-than-expected growth."

The UK has allowed the reopening of shops, gyms, restaurants, and pubs since last week. Due to the severe impact of COVID-19, the UK imposed a third lockdown in early January this year, causing hundreds of thousands of businesses to close for over three months, reducing consumption by ?180 billion (approximately 279 trillion KRW).

The UK aims to fully lift the lockdown in June and complete the first dose of vaccination for the entire population by July. According to Bloomberg Vaccine Tracker, the UK has recently been administering over 400,000 vaccine doses daily.

Ben Broadbent, Deputy Governor of the Bank of England, stated, "As COVID-19 lockdowns are lifted, the UK is expected to experience very rapid growth over the next few quarters."

This content was produced with the assistance of AI translation services.