LONDON, May 12 (Xinhua) — Britain’s gross domestic product (GDP) recorded a 1.5 percent quarterly shrink in the first quarter (Q1) this year amid lockdown measures, but the economic output rebounded in March after COVID-19 restrictions eased, the British Office for National Statistics (ONS) said Wednesday.
The level of GDP in Q1 fell by 6.1 percent when compared with the same quarter a year ago and is 8.7 percent below where it was before the pandemic at Q4 (October to December) 2019, said the ONS.
However, the economy was estimated to grow by 2.1 percent in March 2021, the fastest monthly growth since August 2020, as schools in some parts of the country reopened throughout the month, said the ONS.
“The decline in economic output in the first quarter largely reflected the squeeze on activity from coronavirus restrictions, which was partly offset by growing business resilience to those restrictions and a boost from the reopening of schools in March,” said Suren Thiru, head of economics at the British Chambers of Commerce.
Howard Archer, chief economic adviser at EY ITEM Club, an economics forecasting group in Britain, said the economy contracted in Q1 for the first time since the second quarter of 2020, but the GDP decline of 1.5 percent quarter-on-quarter was “a pretty resilient performance amid lockdown and much less than had been feared at the start of the quarter.”
Thiru said he believes that the first quarter drop should be “followed by a robust rebound in the second quarter as the effects of the release of pent-up demand, as restrictions ease and the strong vaccine rollout, are fully felt.”
Schools reopened to all pupils in England on March 8 as the first step of the British government’s “roadmap” exiting the lockdown. On March 29, two households or groups of up to six were allowed to meet outside, including in private gardens, and outdoor team sports were also reopened in England.
Anna Leach, deputy chief economist in the Confederation of British Industry, said that Britain’s recovery is “very much V shaped” at the moment, adding that “it is expected that the Q1 shrinkage in output represents the bottom of the V.”
In terms of the long-term prospect of the economy, Thiru reckoned that “with the longer-term economic damage caused by coronavirus likely to increasingly weigh on activity as government support winds down, the recovery maybe slower than many, including the Bank of England, currently predict.”
The Bank of England, Britain’s central bank, raised its forecast for British economic growth in 2021 to 7.25 percent from a previous estimate of 5.0 percent made in February, as the COVID-19 vaccination has made great progress here and restrictions have been lifted as expected.
To bring life back to normal, countries such as Britain, China, Russia, the United States as well as the European Union have been racing against time to roll out coronavirus vaccines. Enditem