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Can The UK Bounce Back From Debt?
- By Christopher Reinhold
- Published 05/20/2009
- Local Politics
- Unrated
Christopher Reinhold
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With the most serious economic turmoil over the past 60 years, recession has taken a steep turn worldwide. Not only has this phenomenon affected some small and developing countries, but also the big giants like the US and the UK are also facing its acute impact.
However, to lessen the impact of the mounting debt situation that the UK economy is submerged in, Alistair Darling (the Chancellor of the UK) announced that the country's economy will resume growing at the end of the fiscal year of 2009-10, making it once again the World's economic leader.
Not only this, he also restated the fact that the world economy would grow at almost double the pace in the next 20 years.
However, the country's fiscal position was not at all encouraging, due to problems such as severe recession and mounting unemployment figures. Also, since the Govt. has borrowed huge amounts of funds from almost all possible resources and channels, there is hardly anything left to be spared in the next budget.
Also, the forecast for the economy in the current budget hasn't been too great either. It merely shifted from the 1.25 percent downturn to a bigger correction of 3.5 percent. To add to this problem was that of a budget deficit as great as 175 billion GBP, the highest recorded deficit in percentage of any G20 country. Also, this deficit will see its peak sometime in the year 2013-14, with a soaring rise in the debt percentage.
However, then we will see a recovery in the debt position or the fiscal deficit. According to the estimates provided in the Council, the economy will recover at the growth rate of 1.5 percent in 2010 and 3.5 percent in 2011, when compared to a 3.5 percent deficit recorded this year. The growth curve would therefore be a trampoline instead of the normal U-turn.
This growth forecast, apart from being highly optimistic, is also off-the-scale to a certain extent.
Not only this, according to the given forecast, there will be a good recovery in domestic demand this year, reaching a growth rate of 2.5 and 3 percent. Also, household consumption will rise between 3 and 3.5 percent. This estimate not only assumes the end of the financial crisis, but also believes that the problem of soaring debt is almost cured.
The forecast also doesn't make any provision for the fact that the recessions caused by the financial crisis not only last much longer but are much more intense, too. The problem is further aggravated by the fact that the global economy faces a huge debt, going up to $50 trillion of net asset value.
The UK is buried deep under a mountain of debt, crushing its economy beyond repair. At this moment, a Government policy is required to curb public finances helping the economy recover from the great debt hole. Not only this, the state should encourage people to save funds and promote investment opportunities for all, promoting the "efficiency saving" process.
In such a scenario, all companies (whether small or big in size) are resorting to cost cutting measures and are trying to save as much operational expense as possible. At the same time they don't want to compromise quality. This is happening in all spheres, including the business card printed in the UK.
The companies holding a large budget for having their business cards printed in the UK will have to resort to cost-cutting measures, such as not getting gold rimmed cards printed for employees at lower or middle management levels. Similarly these business cards can be either printed with full colors on one side only or can be printed in black and white, thus reducing printing costs to nearly half. These measures will definitely help companies save money, thereby increasing profits substantially.
However, to lessen the impact of the mounting debt situation that the UK economy is submerged in, Alistair Darling (the Chancellor of the UK) announced that the country's economy will resume growing at the end of the fiscal year of 2009-10, making it once again the World's economic leader.
Not only this, he also restated the fact that the world economy would grow at almost double the pace in the next 20 years.
However, the country's fiscal position was not at all encouraging, due to problems such as severe recession and mounting unemployment figures. Also, since the Govt. has borrowed huge amounts of funds from almost all possible resources and channels, there is hardly anything left to be spared in the next budget.
Also, the forecast for the economy in the current budget hasn't been too great either. It merely shifted from the 1.25 percent downturn to a bigger correction of 3.5 percent. To add to this problem was that of a budget deficit as great as 175 billion GBP, the highest recorded deficit in percentage of any G20 country. Also, this deficit will see its peak sometime in the year 2013-14, with a soaring rise in the debt percentage.
However, then we will see a recovery in the debt position or the fiscal deficit. According to the estimates provided in the Council, the economy will recover at the growth rate of 1.5 percent in 2010 and 3.5 percent in 2011, when compared to a 3.5 percent deficit recorded this year. The growth curve would therefore be a trampoline instead of the normal U-turn.
This growth forecast, apart from being highly optimistic, is also off-the-scale to a certain extent.
Not only this, according to the given forecast, there will be a good recovery in domestic demand this year, reaching a growth rate of 2.5 and 3 percent. Also, household consumption will rise between 3 and 3.5 percent. This estimate not only assumes the end of the financial crisis, but also believes that the problem of soaring debt is almost cured.
The forecast also doesn't make any provision for the fact that the recessions caused by the financial crisis not only last much longer but are much more intense, too. The problem is further aggravated by the fact that the global economy faces a huge debt, going up to $50 trillion of net asset value.
The UK is buried deep under a mountain of debt, crushing its economy beyond repair. At this moment, a Government policy is required to curb public finances helping the economy recover from the great debt hole. Not only this, the state should encourage people to save funds and promote investment opportunities for all, promoting the "efficiency saving" process.
In such a scenario, all companies (whether small or big in size) are resorting to cost cutting measures and are trying to save as much operational expense as possible. At the same time they don't want to compromise quality. This is happening in all spheres, including the business card printed in the UK.
The companies holding a large budget for having their business cards printed in the UK will have to resort to cost-cutting measures, such as not getting gold rimmed cards printed for employees at lower or middle management levels. Similarly these business cards can be either printed with full colors on one side only or can be printed in black and white, thus reducing printing costs to nearly half. These measures will definitely help companies save money, thereby increasing profits substantially.
