Uk Gdp

Topics: Macroeconomics, United Kingdom, Economics Pages: 3 (1028 words) Published: February 4, 2013
GDP is a widely used macroeconomic indicator of a country’s economic situation, growth, and development. The 2008 recession followed by further economic slowdowns had a significant impact on the world’s GDP. However, economic instability at global, regional, or country levels is not the only cause of its changes. While using the example of the UK, which was the most affected state by the 2008 recession among the EU members, we shall determine how the country’s GDP changed during the two post-recession years, namely 2010 and 2011, and which factors influenced these changes. Statistical data and current information will be used in order to show the UK’s GDP and its economic changes. Also, we shall apply general macroeconomic theory and principles in order to determine the interconnections and interplays between different indicators and processes in the UK economy. During 2010 and 2011, the UK economy tried to restore its strength and its GDP was slowly growing. In 2010, the nominal GDP accounted for 1,453.62 billion pounds or 2.247,46 billion US dollars; while in 2011, it accounted for 2.453 billion US dollars. Herewith, the real GDP was 1,312.31 billion pounds in the year of 2010 and grew by 2.1% compared to 2009, while in 2011, the growth was less significant and accounted for 0.7% (“The United Kingdom Country Report,” “United Kingdom Economic Statistics”). These changes were caused by different factors. At the beginning of 2010, the UK exports began to increase, which had a positive effect on the country’s GDP. However, it was not economic recovery, as private and public spending was weak and investments were decreasing. Moreover, government policy aimed at cutting both budget deficit and debt which involved an increase in tax rates and a decrease in government spending. This did not stimulate economic growth. In fact, this limited consumer spending even more and constrained investment (“United Kingdom”). As...
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