Economic Overview
The global economy is forecast to grow by 3.5 percent in 2017, slightly higher than the 3.2 percent growth in 2016. According to the International Monetary Fund, the steady recovery is attributed to better growth outcomes in large emerging market and developing economies (EMDEs) including Brazil, China and Mexico as well as in several advanced4 economies. Additionally, expansions in industrial output, manufacturing and global trade signal sustained growth for the rest of the year. Over the medium-term, some country specific risks remain key concerns to the global outlook.
International Economic Developments
The IMF in its July 2017 World Economic Outlook (WEO) maintained its global growth projection for 2017 at 3.5 percent as global recovery remained stable since April despite idiosyncratic factors across major economies.
Growth projections for Japan and the Euro zone economies for 2017 were revised upward following positive activity in late 2016 and early this year. Similarly, China remains on track to achieve a higher growth in 2017 backed by stronger March quarter performance and expected continuation of fiscal support. Conversely, growth prospects for the United States (US) were lowered amidst weaker performances earlier in the year and expectations for a less expansionary fiscal policy.
Despite a stable outlook for the world economy, risks emanating from protracted periods of policy uncertainties, excessive credit growth in China and increased financial sector risks, faster-than-expected US monetary policy normalisation, protectionist actions by advanced economies, and geopolitical tensions could potentially derail global growth projections.