The United Kingdom is set to witness a collapse in its gross domestic product in the second quarter due to the lockdown imposed to slow the spread of the coronavirus, or Covid-19, pandemic, the National Institute for Economic And Social Research predicted on Wednesday. Earlier in the day, data from ONS showed that GDP dropped 2 percent in the first quarter of 2020, which was the worst fall since the global financial crisis of 2008. “In light of the preliminary release, we forecast growth in the second quarter to decline sharply by about 25 to 30 per cent,” NIESR said.
In the month of March, GDP fell 5.8 percent driven by record falls in construction and services, ONS said. “In a period of radical uncertainty, the short-term economic impact of Covid-19 is becoming clearer with the publication of GDP data for March, where output is expected to be lower by about 25 per cent in months when the lockdown is in place,” NIESR Senior Economist Kemar Whyte said. “Restarting the economy by promoting activities in upstream sectors such as construction, some manufacturing and the government will increase overall activities via helpful spillovers.”
Whyte warned that without a vaccine, there is significant risk of a second wave which could trigger a further setback in the economy.