The World Bank (WB) is more optimistic about global economic growth this year, but remains concerned about the temptation of protectionism and geopolitical tensions. In its new report, the agency projected that the world’s gross domestic product (GDP) will grow 3.1% this year, after 3% in 2017.
This new forecast is 0.2 percentage point higher than its June forecast for 2018. “Global growth is stronger than we expected,” World Bank chief economist Ayhan Kose told AFP. So, 2018 has “good chances” of being the first year since the financial crisis when the world economy will run at full speed or near, said the expert. Growth is driven by investment, manufacturing and trade, while commodity-exporting countries benefit from firmer prices, according to the WB.
The rebound also benefits all regions of the world, beginning with the “big three,” such as the United States (2.5%), the euro area (2.1%) and Japan (1.3%), Kose said.
The WB, which predicted a slight slowdown in China’s growth in 2017, estimated that it has accelerated 0.1 percentage point to 6.8% and expects a slight slowdown this year, to 6.4%.
The two main emerging countries, Brazil and Russia, which grew in 2017 (1.7% and 1%, respectively) after two years of recession, should also continue their recovery this year. “The recovery in global growth is encouraging, but there is no room for complacency,” warned World Bank President Jim Yong Kim.
A severe restriction of global financial conditions could jeopardize the expansion. With regard to Latin America and the Caribbean, the international agency projects growth of 2% in 2018 and 2.6% in 2019. For Ecuador, the World Bank forecasts a growth of 1.4% for 2017. The figure estimated by the Central Bank of Ecuador is 1.5%. (I)