Economists have warned that Wales may already be back in recession, ahead of the rest of the UK
Economists have warned that Wales may have already re-entered the recession, as the country’s economy continues to struggle.
A report yesterday (August 22) showed that Welsh shops had suffered the greatest decline in footfall in the UK. In the second quarter of 2011, the total number of jobseekers in Wales also increased to 10,000.
Economists have argued that as Wales is more vulnerable than the rest of the UK to the recent public spending cuts and growth in the UK economy was just 0.2 percent in the last quarter, Wales is likely to already be in recession.
Dr Calvin Jones of the Welsh Economy Research Unit at Cardiff University
said: “Basically if you look at any economy, this is the UK, parts of Europe, the recovery from recession has been very slow.
“When Germany is reporting growth of 0.2 percent, the strongest economy in Europe, that’s not good.
“The performance of the Welsh economy depends on what happens in not just the UK economy but the wider European and global context. There’s nothing we can do at the moment but ride it out.
He continued: “Clearly the prospects are a lot worse than they were even a few months ago, with the American debt ceiling and the European stock market fall.
“If shares prices continue to plummet or remain very volatile, then businesses are put off investing in new staff or expansion.
“This is by no means a Welsh problem but the problem is, in Wales, it may be worse because we don’t have much economic resilience.
“We don’t have the headquarters of businesses based here. When times are difficult, we’re reliant on the decisions of leaders in other places,” he concluded.
David Pickernell, a professor in economic development policy at the University of Glamorgan
, said: “My gut reaction is it’s going to be very difficult for the next six months to a year.
“The Government is not going to come to the rescue. It could and did a number of years ago when we had the first big shock to the economy.
He added: “That then really means it’s up to the private sector because the public sector is not going to come in with the momentum.”