With buoyant financial markets and a long-awaited cyclical recovery in manufacturing and trade, world growth is projected to rise from 3.1 percent in 2016 to 3.5 percent in 2017 and 3.6 percent in 2018, the International Monetary Fund said Tuesday.
In its World Economic Outlook, the IMF explained that acceleration will likely be broad based across advanced, emerging, and low-income economies, particularly building on gains in both manufacturing and trade.
“This improvement comes primarily from good economic news for Europe and Asia, as well as our continuing expectation for higher growth this year in the United States,” an IMF blog said.
But, the report warns that binding structural impediments continue to hold back a stronger recovery, and the balance of risks remains tilted to the downside, especially over the medium term.
The report comes as finance ministers and experts from around the world gathered in Washington for annual IMF-World Bank Spring meetings.
With persistent structural problems—such as low productivity growth and high income inequality—pressures for inward-looking policies are increasing in advanced economies, the report says.
“These threaten global economic integration and the cooperative global economic order that has served the world economy, especially emerging market and developing economies, well. Against this backdrop, economic policies have an important role to play in staving off downside risks and securing the recovery, and a renewed multilateral effort is also needed to tackle common challenges in an integrated global economy.”
Momentum in the global economy has been building since the middle of last year, allowing us to reaffirm our earlier forecasts of higher global growth this year and next.
