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"If the UK continues with the same level of growth it has seen for the last decade, Poland will be richer than Britain in about 12 years’ time.” Sam Ashworth-Hayes
“We actually live in a world where it is imaginable that in less than 10 years living standards in Poland have exceeded living standards in Britain.” US economist Tyler Cowen talking recently an audience in Westminster
He should have formulated it differe ntly: if _Poland_ continues with the same level of growth etc. It is more or less certain that the UK, as any West-European country, will not increase its level of growth. Because of already achieved development level, because of dumbing down, de-industrialization, because promising technological developments are made in China or the US. The question is if Poland doesn't follow the same pattern soon.
ReplyDeleteThe math is pretty simple. Since 2019, Poland's GDP has grown by about 4.5%. Britain's has contracted by about -0.4%.
ReplyDeleteIt's actually even worse than it sounds, because Britain's population grew slightly over that period, while Poland's population is slowly shrinking. So /per capita/ Polish GDP is growing even faster. On the reasonable assumption that these trends continue, the average Pole should be as rich as the average Briton sometime in the 2030s.
Britain, a trading nation, chose to cut itself out of the world's largest trading bloc. Unsurprisingly, investment, productivity, and growth have all cratered since then. There's no easy fix for this! So everyone -- including Britain's own Central Bank -- is predicting sluggish growth for years to come.
On the plus side, when y'all eventually rejoin the EU, it'll be as a net recipient of aid rather than a donor.
Britain had a lot of economic problems building and the timing for Brexit was not good.
ReplyDeleteWell, breathtakingly incompetent management of the economy certainly didn't help matters.
ReplyDeleteReal wages in the UK are currently lower than they were when the Tories took office 13 years ago -- an impressive accomplishment, in its way.
Anyway, if you want some actual figures: Great Britain, along with Italy, has fallen to the bottom of the league table for "advanced" economies, with a PPP-adjusted per capita income around $56,000. By way of comparison, the USA is around $80,000, the Netherlands are about $72k and Germany is around $66k.
ReplyDeleteThere are a bunch of former Communist countries who are ready to move up: Slovenia ($52k), Lithuania ($49k), Estonia ($46k) and Poland ($45k). All of these are growing faster than the UK, and have been for some time now. So the former Yugoslav republic of Slovenia will probably be wealthier than the UK in the next few years. The others will probably pass the UK over the next six to eight years thereafter. _Sic transit gloria mundi_! You'll still have a lot of interesting museums.
Note that GDP growth and investment were already sluggish before Brexit; from 2011 to 2016 GDP growth was a feeble 2% per year. That's largely on the Cameron governments, who were really not very good at running the UK's economy. But then 2016 arrived and... everything got worse, and then still worse again.
Labour is going to inherit a hell of a mess; good luck to them, they'll need it.