It predicts the economy will expand by 0.8%, an increase from the previous forecast of 0.7%, and in line with the private sector consensus.
However, the figure is still well below the Bank of England’s November forecast of 1.5% GDP growth for the year.
But the OBR has revised down its forecast for 2013 from 2.1% to 2%. Forecasts for 2014-2016 remain in line with previous forecasts.
The 2012 figure will be a boost for Osborne, who slashed his growth forecast for the next few years during the Autumn Statement, but said the UK was unlikely to slide into recession.
In November the OBR forecast GDP growth of 0.9% for 2011, 0.7% for 2012, and 2.1% for 2013. In both 2015 and 2016 it predicted growth would hit 3%.
This was a significant revision from the March 2011 Budget, which suggested the UK would grow by 1.7% during 2011, 2.5% in 2012 and 2.9% in 2012.
Meanwhile the OBR said the euro area will shrink by 0.3% this year, down from 0.8% growth it had previously forecast.
It has also downgraded its forecast for global growth by 0.2% and 0.3%.
Public sector net borrowing (PSNB) for 2011/12 is now expected to come in at £126bn, £1bn lower than the Autumn Statement forecast of £127bn.
But with February borrowing having come in almost twice the predicted amount, the total saving was less than some had expected.The OBR has keep the 2012/13 PSNB forecast at £120bn, excluding the anticipated savings of £25-30bn arising from the transfer of the Royal Mail’s pension fund to the public sector.
PSNB forecasts for subsequent years have been revised down since the Autumn Statement: borrowing is now expected to come in at £98bn in 2013/14 (from £100bn), £75bn in 2014/15 (from £79bn), £52bn for 2015/16 (from £53bn) and £21bn in 2016/17 (from £24bn).
In his Budget speech, Osborne pledged to “repair the disastrous model economic growth that created Britain’s record debt” using far-reaching tax reforms.
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