Global: Economic forecast revisions for 2017 real GDP
Advanced economy prospects revised materially higher
Source: IFM Investors, IMF
The IMF justified the improvements in its forecasts by noting that “buoyant” financial markets and a long-awaited cyclical recovery in both manufacturing and trade are now underway. But equally, it cautioned that more persistent structural
problems including low productivity growth, high income inequality and pressures for inward-looking policies meant risks to growth are still to the downside.
It should also be noted that despite better prospects in advanced economies it is the developing economies still accounting for much of global growth. This comes despite growth forecasts for this bloc being revised down 0.1pp to 4.5%. Developing
economies are expected to account for around 60% of global growth in 2017 – with China a key driver accounting for over a third of this by itself. A notable revision to the IMF’s forecasts was its more positive outlook for China.
April’s WEO now has growth at 6.6% and 6.2% for 2017 and 2018, respectively – up 0.4pp and 0.2pp since October’s forecasts. This was based on an anticipation of “continued policy support in the form of strong credit
growth and reliance on public investment to achieve growth targets”.