Economic trends
The United Kingdom is the sixth largest global economy. However, the country has been deeply hit by the international financial crisis, due to the dominance of the third (financial) sector over its economy. After contracting by almost 5% in 2009, the GDP growth recovered slowly in 2010, however according to estimates it should contract again in 2012.
The financial crisis of 2009 profoundly damaged the country's public finances. Aid to the financial sector and fiscal stimulus measures have deepened the deficit and increased the burden of public debt, the latter reaching record levels. The government's priority is therefore to improve the budgetary situation, despite the social consequences of financial cuts criticized by the opposition. The financial austerity programme launched in 2011 has not brought the desired results in terms of growth, however, the government persists in the pursuit of its austerity policy and focuses on investment and exports in order to boost economic growth.
The unemployment rate, before one of the lowest in Europe, has been rising sharply since the crisis and is estimated at around 8%.
Main branches of industry
The Agricultural sector accounts for less than 1% of the GDP, but is very productive. Main crops are potatoes, beetroot, wheat and barley. Livestock farming (especially sheep and cattle) continues to be a major agricultural activity, despite the crises of "mad cow" and "foot and mouth" diseases. The fishing sector is also well developed but is currently suffering from the depletion of fish volumes in the traditional fishing areas.
The United Kingdom has considerable mineral resources. Once the world's 10th biggest oil producer with huge natural gas reserves, its production is dropping fast. Nevertheless, groups like BP and Shell continue to be amongst the global leaders in the petroleum industry.
The secondary sector is not very competitive. The main activities are tool machinery, transport material and chemical products. The sectors with a good potential are information and communication technologies, bio-technology, aviation industry, renewable energies and defense.
The services sector, which employs three quarters of the active population and contributes three quarters of the GDP, is the driving force behind the economy. London remains Europe's largest financial market place, on par with New York.
International trade
The United Kingdom is one of the biggest actors of international trade. Trade represents almost 60% of its GDP. It is the world's third biggest exporter and the fourth biggest importer of commercial services, and the tenth biggest exporter and sixth biggest importer of goods. The United Kingdom's main trade partners are the European Union, the United States and China.
The United Kingdom shows a trade deficit. Due to the current difficulties of the eurozone, a worsening of the balance is to be expected in 2012.
© Export Entreprises SA, all rights reserved.
Last updates: May 2012
