The global economic upswing that began around mid-2016 has become broader and stronger. The IMF new World Economic Outlook report projects that advanced economies as a group will continue to expand above their potential growth rates this year and next before decelerating, while growth in emerging market and developing economies will rise before leveling off. For most countries, current favorable growth rates will not last. Policymakers should seize this opportunity to bolster growth, make it more durable, and equip their governments better to counter the next downturn.
According to the report, risks for the global economy include tighter global financial conditions such as higher borrowing costs, less available credit, and a sizeable stock market decline. Other risks include trade wars and geopolitical tensions.
Risks around the short-term outlook are broadly balanced, but risks beyond the next several quarters are clearly to the downside.
Global growth is projected to soften beyond the next couple of years. Once their output gaps close, most
advanced economies are poised to return to potential growth rates well below precrisis averages, held back by
aging populations and lackluster productivity. US growth will slow below potential as the expansionary impact of
recent fiscal policy changes goes into reverse. Growth is projected to remain subpar in several emerging market
and developing economies, including in some commodity exporters that continue to face substantial fiscal consolidation needs.
What needs to be done:
The current global economic recovery offers a window of opportunity to advance policies and reforms to secure the upswing, and raise medium-term growth to the benefit of all. Read the April 2018 #WEO https://t.co/9DH3kOuBZ7 pic.twitter.com/bAbGAIp2Nd— IMF (@IMFNews) April 22, 2018
30th September 2021