Tough year ahead as demand drops off
Official growth forecasts for 2002 have been revised down with real GDP now expected to rise by 3.6%, compared with the forecast of 3.9% underpinning the Budget for 2002.
A key element in this downward revision is projected slower growth in real personal spending of 4.3% compared with the original forecast of 5.7%. Even this revised figure lower forecast for personal spending may be too optimistic. Retail sales figures for June, published last Friday, show that sales volume fell by 1.1% in June over May and by 1% in the second quarter over the first quarter. Year on year, the volume of sales fell by 0.2% in the second quarter.
