Dubai: Global growth is projected to strengthen to 3.9 per cent in 2018 and 2019, up from 3.8 per cent in 2017, driven by a projected pick-up in emerging market and developing economies, as well as resilient growth in advanced economies, according to the Word Economic Outlook (WEO) published by the International Monetary Fund (IMF).
The forecast for 2018 and 2019 is stronger than that given in the October 2017 World Economic Outlook by 0.2 percentage points for each year, with positive revisions compared to the October 2017 World Economic Outlook for emerging market and developing economies and especially for advanced economies.
The global effects of US fiscal policy changes account for almost half of the global growth upgrade for 2018–19 compared with October.
Beyond 2019, global growth is projected to gradually decline to 3.7 per cent by the end of the forecast horizon.
Advanced economies are projected to grow at 2.5 per cent in 2018 — 0.2 percentage points higher than in 2017 — and 2.2 per cent in 2019.
For both years, this forecast is considerably stronger than the October WEO forecast (0.5 and 0.4 percentage point higher for 2018 and 2019, respectively).
Positive revisions are broad-based, reflecting stronger prospects for the Eurozone and Japan, and especially the projected domestic and spillover effects of expansionary fiscal policy in the United States. In the US, growth is expected to rise from 2.3 per cent in 2017 to 2.9 per cent in 2018, before moderating slightly to 2.7 per cent in 2019, 0.6 and 0.8 percentage point stronger than projected for 2018 and 2019, respectively, in the October WEO.
The recovery in the Eurozone is projected to pick up slightly to 2.4 per cent this year, up from 2.3 per cent in 2017, before moderating to 2 per cent in 2019.
Emerging markets
Growth in emerging market and developing economies is expected to increase further — from 4.8 per cent in 2017 to 4.9 per cent in 2018 and then to 5.1 per cent in 2019.
Emerging Asia, which is forecast to continue growing at a rate of about 6.5 per cent during 2018–19, remains the most important engine of global growth.
In China, growth is projected to soften slightly to 6.6 per cent in 2018, down from 6.9 per cent in 2017, before easing further in 2019 to 6.4 per cent.
Growth in India is projected to increase from 6.7 per cent in 2017 to 7.4 per cent in 2018 and 7.8 per cent in 2019 (unchanged from the October WEO), lifted by strong private consumption as well as fading transitory effects of the currency exchange initiative and implementation of the national goods and services tax.
