LONDON, May 23 Reuters The International Monetary Fund no longer expects a recession in Britain this year, it said on Tuesday, praising steps taken by the government to stabilise the economy and fight inflation and warning against preelection tax cuts.

The IMF said gross domestic product now looks set to grow by 0.4 in 2023 rather than contracting by 0.3 as it had predicted in April. The earlier forecast was the weakest for any major economy this year but the new growth projection would see Britain edge ahead of some rich world peers including Germany.

While the IMF warned the outlook remains subdued, it said Prime Minister Rishi Sunak39;s government was on the right track, in contrast to its concerns about the direction of economic policy under former premier Liz Truss.

The UK authorities have taken decisive and responsible steps in recent months, IMF Managing Director Kristalina Georgieva told a press conference on Tuesday.

What we see is that the government is prioritising, and rightly so, the fight against inflation.

Sunak and finance minister Jeremy Hunt took over in October, after Truss39;s brief term sowed chaos in financial markets.

The IMF said Britain39;s improved outlook reflected the unexpected resilience of demand, helped in part by faster than usual pay growth, higher government spending and improved business confidence.

The fall in energy costs after sharp rises last year and the normalisation of global supply chains also helped, it said….