SEARCH MENU
Caspian Energy Journal Caspian European Club
December 2018
S M T W T F S
1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31
Thursday, 15 November 2018 15:00

Fitch updates UK fiscal forecasts

Fitch updates UK fiscal forecasts

UK fiscal deficits are slightly higher in 2019 and 2020 under Fitch’s updated public finance projections, but these are still consistent with a gradual fall in government debt/GDP. Fitch Ratings’s updated projections incorporate last month's Budget and are set out in Fitch’s latest full rating report for the UK sovereign, Caspian Energy News (www.caspianenergy.net) reports with reference to Fitch Ratings.

Fitch affirmed the UK's 'AA'/Negative rating on 26 October. Fitch noted at the time that pledges already made by the UK government to increase healthcare spending would be partly offset by this year's robust revenue growth, but that it was unclear if the Autumn Budget would seek to address the fiscal impact in 2019 and 2020. As a result, Fitch has increased its deficit forecasts to 1.4% of GDP in both 2019 and 2020. The cumulative revision of 0.3pp over two years also incorporates the Office for Budget Responsibility's confirmation that public finance outturns in the current fiscal year point to a substantial undershoot in the deficit, of about 0.5% of GDP. Official economic forecasts see real annual GDP growth averaging 1.5%, which is broadly consistent with Fitch’s own scenario where a 'no-deal' Brexit is avoided.

Fitch’s new projections still see the general government debt/GDP ratio edging down, albeit more slowly, to 85.9% this year (including the sale of the government's stake in Royal Bank of Scotland) and 83.4% in 2020, compared to 82.3% in 2020 when Fitch affirmed the UK sovereign rating. This would be more than double the forecast 'AA' category median of 39%.

More details: https://www.fitchratings.com/site/pr/10051963

Person in charge of the newsline: Olga Nagiyeva 

Read 476 times
POWERED BY ZEYNURBABAYEV