World Bank Still Sees Global Growth Picking Up Amid Policy Risks – 5 Jun 2017

  • The World Bank kept its outlook for the global economy unchanged, forecasting a modest pickup in growth despite uncertainty about monetary policy and the risk of a surge in protectionism.
  • The development lender projects the world economy will grow by 2.7% in 2017 and 2.9% in 2018, the same as its Jan 17 forecast.
  • “Global activity is firming broadly as expected,” the World Bank said in a report released 4 Jun 17. “Manufacturing and trade are picking up, confidence is improving, and international financing conditions remain benign.”
  • Still, the lender warned that risks to its global outlook remain tilted to the downside. “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.
  • Risks include unexpected changes in monetary, trade or other policies in major economies, as well as financial-sector uncertainty and geopolitical turmoil, according to the bank.
  • The lender is projecting that growth in the volume of world trade will accelerate in 2017 to 4%, up 0.4% from its Jan 17 forecast. But it cautioned that “additional erosion of the multilateral rules-based system that has been built since the mid-1940s could put downward pressure on economic integration, and ultimately on growth and job creation.”
  • The World Bank didn’t include proposals by the administration of President Donald Trump to cut taxes and boost infrastructure spending, noting the administration hasn’t provided enough details and the time frame is unclear.

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