The World Bank expects the world economy to expand by 2.7 percent this year, as manufacturing, trade, and overall market confidence begin to pick up.
According to the bank’s June 2017 Global Economic Prospects, emerging market and developing economies are forecast to grow 4.1 percent in 2017, up from an eight year low of 3.5% in 2016, while growth in advanced economies is expected to accelerate to 1.9 percent.
The bank said growth among the world’s seven largest emerging market economies is expected to increase and exceed its long-term average by 2018.
The World Bank said it “forecasts that global economic growth will strengthen to 2.7 percent in 2017 as a pickup in manufacturing and trade, rising market confidence, and stabilizing commodity prices allow growth to resume in commodity-exporting emerging market and developing economies.”
World trade is forecast to accelerate to 4 percent this year, up 0.4 percentage point from the bank’s previous forecast in January.
However, the bank said that “substantial risks cloud the outlook”, such as the prospect of new trade restrictions and major monetary policy changes being made by the world’s leading economies.
“Policy uncertainty is likely to remain high in 2017, and there is a risk that financial-market volatility could increase from current low levels,” the bank said.
World Bank Group President Jim Yong Kim said:
“For too long, we’ve seen low growth hold back progress in the fight against poverty, so it is encouraging to see signs that the global economy is gaining firmer footing,”
“With a fragile but real recovery now underway, countries should seize this moment to undertake institutional and market reforms that can attract private investment to help sustain growth in the long-term.
“Countries must also continue to invest in people and build resilience against overlapping challenges, including climate change, conflict, forced displacement, famine, and disease.”