The estimates suggest that the economy continued to flat-line in the first two months of this year and the negative output gap continues to widen.
However, NIESR expects the economy to expand this year. Its latest quarterly forecast (published 5th February 2013) projects growth of 0.7% per annum this year and 1.5% in 2014.
A statement from the NIESR said: “The National Institute interprets the term “recession” to mean a period when output is falling or receding, while “depression” is a period when output is depressed below its previous peak. Thus, unless output turns down again, the recession is over, while the period of depression is likely to continue for some time. We do not expect output to pass its peak in early 2008 until 2015.
“Our track record in producing early estimates of GDP suggests that our projection for the most recent three-month period has a standard error of 0.1-0.2% point when compared to the first estimate produced by the Office for National Statistics. This comparison can be made only for complete calendar quarters. Outside calendar quarters the figures are less reliable than this and they are also likely to be less accurate in the current disturbed economic circumstances.”
