Government spending set to reach 50 per cent of GDP
Government spending set to reach 50 per cent of GDP
Monday 29th June 2009
Government spending is set to reach 50 per cent of GDP in the UK by next year.Regional output in Northern Ireland and Wales will also reach 70 per cent, according to the Centre for Economics and Business Research (CEBR).
The economics consultancy said spending plans released by Treasury show "significant increases in the share of public expenditure across all regions".
The CEBR found in its repeated annual analysis that government expenditure is forecast to rise to nearly 70 per cent of regional output for some regions.
In a statement the CEBR said: "The analysis shows how great is the scale of divergence in public spending between regions in the United Kingdom as a share of GDP. In Cuba, government budget expenditure as a share of GDP is expected to fall to around 60 per cent in 2010-11."
The calculations are based on the Public Expenditure Statistical Analysis (PESA), published by the Treasury.
The statement continued: "It is partly a chicken and egg situation - public spending in some regions is high because they are doing less well economically, but on the other hand a high public spending share can impede the revival of the private sector. The latest data suggest that this problem is due to get worse."
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