Global growth set to strengthen to 2.7% as outlook brightens
Monday, 2017-06-05 10:02:55
The World Bank forecasts that global economic growth will strengthen to 2.7% in 2017 as a pickup in manufacturing and trade, rising market confidence, and stabilising commodity prices allow growth to resume in commodity-exporting emerging market and developing economies.
According to the World Bank’s June 2017 Global Economic Prospects, growth in advanced economies is expected to accelerate to 1.9% in 2017, which will also benefit the trading partners of these countries.
Global financing conditions remain favourable and commodity prices have stabilised.
Against this improving international backdrop, growth in emerging market and developing economies as a whole will pick up to 4.1% this year from 3.5% in 2016.
Growth among the world’s seven largest emerging market economies is forecast to increase and exceed its long-term average by 2018.
Recovering activity in these economies should have significant positive effects for growth in other emerging and developing economies and globally.
Nevertheless, substantial risks cloud the outlook. New trade restrictions could derail the welcome rebound in global trade. Persistent policy uncertainty could dampen confidence and investment.
Amid exceptionally low financial market volatility, a sudden market reassessment of policy-related risks or of the pace of advanced-economy monetary policy normalisation could provoke financial turbulence.
Over the longer term, persistently weak productivity and investment growth could erode long-term growth prospects in emerging market and developing economies that are key to poverty reduction.