In a tweet following the publication of new gross domestic product (GDP) figures by the Office for National Statistics (ONS), the Conservative Party claimed: “The UK economy recorded the fastest growth in the G7” in 2022.
This claim was also made by chancellor Jeremy Hunt, who tweeted: “The fact the UK was the fastest growing economy in the G7 last year - as well as avoiding recession - shows our economy is more resilient than many feared.”
GDP measures the value of goods and services produced in a country, with GDP growth a key measure of the strength of a country’s economy.
It is true that, when comparing annual GDP in 2022 with 2021, the UK economy grew by 4%—the fastest rate in the G7.
However, as others have pointed out, when making this comparison it’s worth bearing in mind that in 2021 the economy was still impacted by the Covid-19 pandemic so comparisons with this period are not necessarily the most useful way of assessing recent economic growth.
Looking at other periods not impacted by the pandemic, the UK’s growth does not compare as favourably to other G7 countries.
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UK economy still smaller than pre-pandemic
ONS statistics show that the UK’s GDP growth between the final quarter of 2019 (pre-pandemic) and the final quarter of 2022, was the lowest in the G7, at -0.8%.
This means the UK is the only G7 country in which the economy remains smaller than it was before the pandemic. (Data for Q4 is not available for Japan, but data from Q3 2022 shows Japan’s GDP has grown since before the pandemic).
For comparison, the US GDP grew by 5.1% over this period, with the second-worst performing economy, Germany, growing by 0.2% between Q4 2019 and Q4 2022.
The ONS has noted that international comparisons of GDP figures over the Covid-19 pandemic “have been complicated by methodological differences”.
The House of Commons Library has said: “Headline GDP growth figures across countries are not 100% comparable during the pandemic. UK growth is relatively lower in 2020 – and higher in 2021 and 2022 – due to differences in how output in the education and health sectors was calculated.”
While annual growth between 2022 and 2021 was higher in the UK, the same can’t be said when comparing quarter-on-quarter growth in 2022.
Between the last quarter of 2021 and the first quarter of 2022, the UK saw the third fastest growth in the G7, at 0.5%. This fell to 0.1% in Q2 (the same growth rate as Germany, with only the US economy performing worse during this period).
The UK economy contracted by 0.2% during Q3—the joint worst growth during this period, alongside Japan.
And while it did not record a second consecutive quarter of negative growth in Q4, avoiding a technical recession, the economy was flat (0% growth). This was better than Germany and Italy which both recorded negative growth during the Q4, and worse than Germany, the USA and Canada (data for Japan is not yet available).
The ONS has cautioned that estimates for Q3 and Q4 of the year are somewhat affected by the bank holiday for the funeral of Queen Elizabeth II in September and that: “for Quarter 4 2022, GDP estimates are subject to more uncertainty than usual as a result of the challenges we faced estimating GDP in the current conditions.”
We’ve contacted the Conservative Party and the Treasury for comment and will update this piece if they respond.
Image courtesy of Number 10