United Kingdom's economy can shrink by 35 percent in the April-June period and the rate of unemployment may be more than double to 10 percent because of the government's coronavirus or COVID-19 lockdown, the independent budget forecaster of the country stated.
The Office for Budget Responsibility stated that the budget deficit my hit 273 billion pounds in the 2020/21 tax year, which is five times its previous estimate and is very much equivalent to 14 percent of the gross domestic product, its the biggest since World War Two.
UK economy to shrink due to Coronavirus lockdown
The projection was based on the assumption that the shutdown lasts for three months followed by another three-month period during which restrictions are partially lifted, the OBR said.
It said the economy could bounce back quickly after the plunge in the second quarter. The OBR said public sector net debt could exceed 100 percent of gross domestic product during the 2020/21 financial year but end it at around 95 percent of GDP. Before the crisis, the OBR had forecast debt would be 77 percent of GDP in 2020/21.
(With agency inputs)