IMF raised its forecast for global growth in 2017 thanks to manufacturing and trade gains in Europe, Japan and China, but warned of protectionist trade policies that threaten to halt large-scale recovery.
The IMF forecast, which begins spring meetings with the World Bank in Washington this week, the global economy to grow 3.5 percent in 2017, up from 3.4 percent in its previous forecast in January.
In the latest report of the World Economic Outlook, the Fund said that it is expected that the developed economies are experiencing chronic weakness of the wave of recovery in manufacturing and global trade benefits began gaining momentum in the last summer.
Morris said Oobstfeld, chief economist of the IMF in the report, “it seems that we expect economic improvement since the period began to materialize.”
The fund raised its forecast for growth in Japan in 2017 by about 0.4 percentage points from January estimates to 1.2 percent and raised its forecast for growth in the euro zone and China 0.1 percentage points to 1.7 and 6.6 percent respectively.
At the same time, it kept the IMF forecast for growth in the United States this year unchanged at 2.3 percent, which is a big jump compared with growth of 1.6 percent in 2016, for reasons including expectations that US President Donald Trump offers to cut taxes and increased government spending, and also revised its forecast for growth in Britain this year to two percent, up half a percentage point from its forecast in January and said that the appearance of the negative repercussions of the vote in favor of the exit from the European Union will take longer.
Although growth is improving in general, apparently between developed and emerging economies, as well as oil exporters and commodity beneficiaries of the price recovery, including Russia, the Fund said the recovery is still fragile, and the prospects facing unfavorable factors, including productivity growth and policies that have chronic weakness restrict trade. The Fund did not mention particular trade policies to manage Trump, whose slogan is “America First” and aims to reduce the trade deficit of the United States.