Policy Brief on the economy updated

The Policy Centre Jersey has updated its Policy Brief on the economy, to include the most recent figures on the size and growth of the economy and the analysis in the Fiscal Policy Panel’s annual report, published on 13 November.

The Brief includes a new section on growth of the economy. This notes that in 2000, following years of rapid growth, Gross Value Added (GVA) (the best measure of the size of the economy) was £5,799 million and it then fluctuated reaching a new peak of £5,801 million in 2007. By 2013 the economy had shrunk by 15% and, given the increase in population, GVA per head had fallen by over 20%. There was then a steady recovery until 2020 when the pandemic caused a near 10% reduction in the size of the economy. This was reversed in 2021 and strong growth of 6.7% was recorded in 2022. It was only in 2022 that GVA exceeded the 2000 figure. However, given the increase in population real GVA per head was 9% lower than in 2000.

The Fiscal Policy Panel is forecasting an increase in real GVA of 1.7% in 2023 and 2.6% in 2024, followed by falls of 0.2% in 2025 and 0.5% in 2026. These figures imply only a modest increase in real GVA per head, which will remain below the figures recorded in 2000 and 2007.

The Brief includes the Panel’s forecasts for other economic variables. Inflation, measured by RPI, is expected to fall from 10.8% in 2023 to 5.3% in 2024 and 0.8% in 2025, real earnings are forecast to continue to fall until 2025 and house prices are forecast to fall by 2% in 2023, be stable in 2023 and rise by 4% in 2025.

The Brief also includes full details of the Government’s policies on the economy.

The brief is one of 20 that cover all aspects of public policy. They are continually updated.