The International Monetary Fund revised its growth forecast for the global economy in October. It now predicts growth of 3.6% this year and 3.7% in 2018 – 0.1% higher than its previous forecasts, and well above 2016’s global growth rate of 3.2%.
The IMF said that most of the 2017 upgrade “owes to brighter prospects for the advanced economies, whereas for 2018’s positive revision, emerging market and developing economies play a relatively bigger role.”
The global economy is experiencing a “welcome cyclical upturn after disappointing growth over the past few years,” the IMF said in its report.
Broad-based upward revisions in the euro area, Japan, emerging Asia, emerging Europe, and Russia more than offset downward revisions for the United States and the United Kingdom.
UK growth forecast same as in its July report
The IMF continues to expect UK economic growth to slow from 1.8% in 2016 to 1.7% this year and to 1.5% next year.
The IMF forecasts weaker growth in consumer spending due to the decline in the value of the pound and subsequent impact on real incomes.
US downward revision
The IMF forecasts US economic growth of 2.2% this year and 2.3% in 2018, down from April when the IMF predicted 2.3% growth in 2017 and 2.5% in 2018.
“The downward revision relative to April forecasts reflects a major correction in U.S. fiscal policy assumptions,” the IMF wrote in its World Economic Outlook report.
Chart of countries and their predicted growth rates