Wednesday, 26 September, 2018

World Bank upgrades global growth forecasts as recovery strengthens

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Nellie Chapman | 10 January, 2018, 12:11

By contrast, growth in developed economies is projected to slow to 2.2% in 2018, from 2.3% past year, as central banks gradually remove their post-crisis monetary policies and investment levels off.

While the Indian economy was estimated to have grown at 6.7% in 2017, the World Bank has faith that the country's economy will grow faster than other emerging nations in 2018 - and possibly for the next decade.

In an update of its twice-yearly economic report, the World Bank however warned that the economic upswing this year was temporary unless governments adopted policies that would focus on increasing workforce participation.

In its report, the World Bank said: " India is expected to pick up to a 7.3 percent rate in fiscal year 2018/19, which begins April 1, from 6.7 percent in FY 2017/18". The recovery is expected to solidify, as improving business sentiment supports a modest rise in investment.

In their "Broad-Based Upturn, but for How Long?" report, the WB analysts upgraded their outlook for Armenia by 1 percentage point, compared with their June outlook, to 3.7% in 2017, by 0.7% to 3.8% in 2018 and by 0.6% to 4% in 2019.

In Latin America, the strongest growth is expected to comefrom Panama at a clip of 5.6%, while Venezuela's economy is expected to contract 4.2% this year.

Structural reforms could however be slowed down, says the bank as a result of persisting policy uncertainty.

In addition, large commodity exporting economies like Russian Federation and Brazil - that were struggling and saw their economies contract in 2016 - recovered previous year.

WB experts expect that the GDP growth of Azerbaijan will be 1.5 percent in 2019 and 2.6 percent - in 2020.

The World Bank projects the USA will grow 2.5 percent this year, up 0.3 percentage point from its June forecast.

The latest report expected global growth "to be sustained over the next couple of years - and even accelerate somewhat in emerging market and developing economies (EMDEs) thanks to a rebound in commodity exporters".

Meanwhile, the agricultural sector recorded its biggest quarterly growth in 21 years, climbed 44.2% in the quarter under review, higher than a 38.7% increase in the second quarter.