Section II The forecast in detail

Extract

It now seems likely that the economy will grow by just over 3 per cent in 2000, although the fuel crisis has obscured the picture to some extent. The latest retail sales figures indicate strong growth in high street spending, with the three months to September 1.6 per cent higher than the previous three months and 4.3 per cent higher than the same period in 1999. Second quarter government consumption increased by 1.9 per cent to recover from the fall in the first quarter. This accelerated growth is needed to meet spending targets. Our forecast is for an overall 2 per cent growth rate in the current year rising to 4 per cent next year. Gross fixed investment was some 6 per cent higher in 1999 over the previous year, and we are forecasting this to slow to 21h per cent for the current year, rising to 5 per cent for the next two years. Inventory accumulation should recover from the de-stocking evident last year.