After years of tepid growth and a rather slow 2016, the global economy is on course for its best performance in several years, according to latest data from the International Monetary Fund. This is despite trade tensions and looming geopolitical threats, said the IMF ahead of its Spring Meetings taking place in Washington D.C. this week. The IMF nudged up its forecast for world growth in 2017 by 0.1% to 3.5%. If this growth is achieved, it would be the fastest growth in five years. The IMF’s Chief Economist Maurice Obstfeld noted that, “Acceleration will be broad-based across advanced, emerging and low-income economies building on gains we have seen in both manufacturing and trade”.
In the March edition of the ‘Monthly Economic Update’ of the Ceylon Chamber of Commerce Economic Intelligence Unit, we noted that growth in some of the key developed markets is beginning to turn around, and that now the main risk for the global economy was the rise of protectionism (and its impact on trade flows) amidst an anti-globalisation sentiment spreading through many countries.
The outlook for US growth remained unchanged from its existing forecast of 2.3% (which was already up from 1.6% from last year). But notably, it notched up growth forecast for five of Europe’s largest economies. The U.K’s bump was the biggest, up 0.5% to 2%. Meanwhile in China, government stimulus has pushed China’s growth forecast up 0.1% to 6.6% and Japan’s by 0.4% to 1.2%.