World Bank predicts global economy to grow at 2.7 percent in 2017

Economy - Himanshu Gill - Jan 11,2017

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world bank predicts global economy to grow at 2 7 percent in 2017

Amid rising uncertainties caused by Brexit and Donald Trump’s trade policies, the World Bank has predicted a moderate pickup of 2.7 percent in the global economy for 2017.

The Washington-based bank said that 2016 was the weakest year for the global economy since the recession of 2008-09 and expressed concerns that uncertainty and protectionist tendencies could further undermine pickup in 2017.

Among the factors that would contribute growth in the global economy are recovering oil and commodity prices that have eased pressures on emerging-market commodity exporters. Moreover, the painful recessions in two large economies - Brazil and Russia - have come to an end.

According to the World Bank, growth in developed economies is expected to edge up to 1.8 percent in 2017 as compared to 1.6 percent in 2016, while emerging and developing economies will witness the growth of 4.2 percent this year from 3.4 percent last year.

However, the bank pointed a key concern for emerging economies highlighting that the rise of interest rates in the US and the strong dollar has led to a notable tightening of financial conditions, which makes credit either more expensive or harder to get.

World Bank Group President, Jim Yong Kim, said that after years of disappointment the world is encouraged to see stronger growth prospects. He further stated that this is the right time to invest in infrastructure and other resources.

There are considerable levels of uncertainty surrounding the global growth as the World Bank didn’t incorporate the much-feared policy proposals of Donald Trump. An increased fiscal stimulus from tax cuts and infrastructure spending, and disturbed trade relations with Mexico and China could negatively affect the growth rates.

The World Bank predicts US growth for 2017 at 2.2 percent versus 1.6 percent in 2016, but the increase is considered to be highly volatile.