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maltatoday WEDNESDAY 15 NOVEMBER 2017 11 Business Today www.creditinfo.com.mt info@creditinfo.com.mt Tel: 2131 2344 Your Local Partner for Credit Risk Management Solutions Supporting you all the way UK can expect 150bn windfall after Brexit, according to Economists for Free Trade The Economists for Free Trade (EFT) group said Brexit will be "overwhelmingly positive" for the British economy provided the Government adopts the right policies. The findings are sharply at odds with most mainstream economists who have warned the UK faces lower growth and more pressure on the public finances as a result of the vote to leave. But at the report's launch yesterday, the pro-Brexit Tory MP Jacob Rees-Mogg said official forecasts are based on "false assumptions" of the Treasury and that the outlook for the public finances is "much better" than the Office for Budget Responsibility (OBR) is predicting. The EFT - headed by Professor Patrick Minford - insists the priority for the Government should be to bring down trade barriers with the rest of the world once Britain has left the EU while reducing the burden of regulation and taxation on firms and individuals. It argues a "dynamic stimulus from classic free trade" combined with continued restraint in public spending could provide "post-Brexit fiscal freedom" worth £135 (€150) billion between 2020 and 2025, with a further £40 billion a year from 2025 - including £10 billion a year saved by no longer having to pay into EU budgets. In his speech, Rees-Mogg said that the free trade approach focuses on consumers, not producers and will generate gains to consumers seven times the cost to producers. "This is a classical view of the world that has economic history and the latest economic modelling on its side. This is a free trade approach to Government which believes Britain's greatest days lie before it and not behind it." He added that the report's recommendations would lead to an intensification of competition in the UK economy, resulting in a stronger performance than the latest OBR forecasts are expected to show when they are released alongside the Budget on 22 November. "It (the OBR) does its work worthily and reputably, but on the basis of false assumptions given to it by the Treasury," he said. IMF warns Europe to 'prepare for a rainy day' Policymakers should take advantage of the economic recovery and make room in the budgets for "manoeuvre" in "worse times", the IMF said in its Economic Outlook for Europe released on Monday. This comes as the GDP for both the euro area and the EU28 increased by 0.6% during the third quarter of 2017, according to figures from the Statisti cal Office Of The European Communities, Eurostat. This is up 2.5% compared with the third quarter of 2016. The IMF economic outlook said: "Imminent growth prospects for Europe are positive, but challenges remain over the longer term. Many European countries still have only a thin cushion accumulated for a rainy day, weak productivity growth, and bad loans inherited from the financial crisis of 2008." Because of this, all European governments should take advantage of the economic upswing to ensure their economies adjust to potential changes, the outlook, which looked at more than 40 countries, said. Advanced economies with high public debt, such as Belgium, France, Italy, Portugal, Spain and the UK should work towards lowering their debt without "jeopardising the economic uptick". Countries with more "wiggle room" in their budgets, such as Germany, the Netherlands and Sweden, should increase public investment in infrastructure, the integration of immigrants and housing to lift their potential growth. According to the European Union data, Germany's GDP growth accelerated to 0.8% while Italy picked up to 0.5%. Earlier this month, Eurostat figures showed that the eurozone grew at the fastest pace since 2001, with a growth of 0.7% in the second quarter of 2017. In emerging economies, budget deficits are still significant, the IMF said, and such countries, including Hungary, Poland, Romania, and countries in the western Balkans and in the Commonwealth of Independent States, should improve the quality of their public expenditure and modify their revenue compositions. The real gross domestic product growth is projected at 2.4% in 2017, up from 1.7% in 2016. The growth was mostly driven by domestic demand, including a pickup in investment, according to the outlook. But the UK's growth slowed, as a result of the weaker pound after the Brexit vote, the IMF said. Unemployment also decreased throughout the region, with wages in central and south eastern Europe growing strongly in the past several years, mainly in the services sector. A new report claims the UK government can look forward to a post-Brexit windfall worth €150 billion European economies are recovering but governments should "prepare for a rainy day", the International Monetary Fund has said.