WASHINGTON – The International Monetary Fund (IMF) on Tuesday revised its forecast for global economic growth in 2017 upward by one-tenth of a percentage point to 3.5 percent but left its 3.6 percent forecast for 2018 unchanged, and warned of the risks of “isolationist policies” among advanced economies.
The IMF’s “World Economic Outlook” highlights as major contributors to the upward revision – which sees global gross domestic product (GDP) growth rising four-tenths of a point above the 3.1 percent figure in 2016 – improved economic conditions in China and the US, the latter as a result of President Donald Trump’s promised fiscal expansion.
The report projects 6.6 percent GDP growth this year in China and 2.3 percent GDP growth in 2017 followed by 2.5 percent growth in 2018 in the US.
The US estimates are the same as in the January forecast, but they are one-tenth and four-tenths of a point, respectively, above the IMF’s October 2016 forecast.
The report revised the 2017 forecast for Latin America downward by one-tenth of a percentage point to 1.1 percent, compared to the 1.2 percent expected in January, and estimated 2 percent regional GDP growth in 2018.
Latin America is on course to leave behind the 1 percent GDP contraction registered in 2016, driven by projected 1.7 percent economic growth in Mexico this year and Brazil’s return to growth with a 0.20 percent expansion in GDP.
The IMF’s forecast for Brazil, the region’s largest economy, is in line with the estimates released in January and raises by two-tenths of a point – from 1.5 percent to 1.7 percent – the expectation for GDP growth in 2018.
The international financial institution raised its forecast for Spain from 2.3 percent growth in 2017 in January to 2.6 percent, and maintained its estimate of a 2.1 percent increase in GDP in 2018.
Both figures are above the average GDP estimates for the Eurozone.