WASHINGTON: The World Bank is keeping its forecast for global growth in 2017 unchanged, because for the first time in years, no new risks have arisen to threaten the outlook.
“Over the past four years this is the first time we didn´t have a downgrade and I think that´s very good sign. Growth is firming,” World Bank economist Ayhan Kose told AFP.
The World Bank expects the global economy to grow by 2.7 percent this year, and 2.9 percent in 2018 and 2019, the same as the January forecast. And after 10 years of crisis and tepid recovery, keeping a stable growth forecast is news.
Kose, who heads the World Bank´s Development Prospects Group, which twice a year prepares the global economic forecasts, attributes the good news to the fact the risks, while still present, have receded.
The issues that had the potential to derail the incipient recovery included stress in financial markets as they adapt to rising US interest rates, uncertainty over the stability of oil prices, and concerns about election outcomes in Europe.
But after the Federal Reserve´s two rate increases in recent months, markets have reacted “very well,” European political uncertainty “has receded quite a bit” — French voters rejected the anti-EU candidate — and oil prices while still low, have stabilized after OPEC and non-OPEC oil producers extended the agreement to limit output.
“All in all, we still think that risks are tilted to the downside but the risk profile is a little bit more improved today versus six months ago,” Kose said.