NEW DELHI: World Bank kept unchanged its forecast for growth of global economy at 2.7% for 2017 and 2.9% for 2018, amid pick up in manufacturing and trade and improved confidence.
The world economy is set to register a strong growth in 2017, in view of improving global trade and improved performance by major emerging economies, but substantial uncertainties could still loom over the outlook, said the World Bank.
Increasing trade protectionism measures and policy uncertainties, majorly in the US, pose significant cautions for the growth outlook. This is for the first time in the last four years that the recent edition of the Global Economic Prospects report of World Bank has not lowered the growth prediction even as new risks have emerged.
“Despite substantial policy uncertainty, the global economy still is expected to grow by 2.7% for 2017, rising to 2.9% in 2018 and 2019,” the report said.
“Global growth is firming, contributing to an improvement in confidence. A recovery in industrial activity has coincided with a pick-up in global trade, after two years of marked weakness,” it said.
The world’s seven biggest emerging market economies, Brazil, Russia, India, China, Mexico, Indonesia and Turkey, remain the major engines for the global economy and the growth of these economies is likely to surpass its long-term median by 2018.
As a group, these emerging developing and market economies are likely to grow at 4.1% in 2017, led by India, which is projected to grow by 7.1%, and China by 6.5%.
In the meantime, Brazil and Russia are likely to revive their growth after shrinking for the last two years. Advanced market economies are expected to grow at a modest pace, with the US likely to expand by 2.1% in 2017, the euro region by 1.7% and Japan by only 1.5%.
However, the World Bank cautioned that substantial uncertainties could cloud this growth outlook.
“Rising protectionism, policy uncertainties, geopolitical risks or renewed turbulence in the financial market could disrupt an incipient revival,” it added. The exit of Britain from the European Union (EU) also poses uncertainties to the growth outlook, particularly given the unknown result.