UK Statistical Data "Major Revision": Economic Recovery Post-Pandemic Stronger than Expected
According to the revised official statistics, the recovery of the UK economy after the pandemic is stronger than previously thought. The Office for National Statistics reports that GDP in the fourth quarter of 2023 is 2.2% higher than at the end of 2019, rather than 1.9%. The contraction of the economy has also been revised from 10.3% to 10%. The actual GDP growth rate for 2023 has been adjusted down to 0.3%, while the growth rate for 2022 has been revised up to 5.1%. The GDP growth rate for 2024 is expected to be 1.1%
According to improved official statistics, the recovery of the UK economy after the pandemic is stronger than previously thought. A report released by the Office for National Statistics (ONS) on Monday shows that the new data incorporates updates in methodology and data sources. The data indicates that by the fourth quarter of 2023, the UK's Gross Domestic Product (GDP) is 2.2% higher than at the end of 2019, rather than the previously estimated 1.9%. Meanwhile, the impact of the pandemic in the first year was also less severe than initially estimated, with the economy contracting by 10% instead of 10.3%.
These data revisions suggest that the recovery of living standards for UK households is also faster. The ONS stated that by the end of 2023, real GDP per capita is 1% lower than pre-pandemic levels, rather than the previously estimated 1.4% lower.
Weak household consumption and net trade estimates have weighed on the UK economy in 2023. The real GDP growth rate for 2023 has been revised down to 0.3%, from a previous estimate of 0.4%. Meanwhile, the GDP growth rate for 2022 has been revised up to 5.1%, from 4.8%. The GDP growth rate for 2024 is currently projected at 1.1%.
These revisions cover data from 1997 to 2023 and will be published in the "Blue Book" at the end of September as core data. The estimates for 2023 are the first to use the supply and use table framework, while the estimates for 2021 and 2022 have been improved through updated data and sources.
The improved survey data, along with updates to the ONS's estimation methods for the activities of large multinational pharmaceutical companies, show that R&D's share of the economy is larger than previously thought, positively impacting GDP levels. Previously, between 2018 and 2022, the UK's R&D expenditure was considered relatively low compared to other developed economies. However, the ONS now believes that the UK's average R&D expenditure during this period is higher than that of France and the Netherlands, but still lower than that of Germany, the United States, and Japan.
Additionally, a separate revision of trade data shows that the total goods and services deficit (including non-monetary gold) at current prices in 2023 has widened to £32.1 billion, which is £3 billion more than the latest quarterly national accounts estimate
