The global economy rebounded in 2017, rising to 3 percent up from 2.4 percent in 2016, as trade picked up momentum, advanced economies increased investments, and developing countries exported more commodities, the World Bank reported Jan. 9.
The bank sees global growth edging up slightly to 3.1 percent in 2018 as developing countries experience greater growth while advanced economies begin to back off emergency monetary policies.
These numbers differ from projections the International Monetary Fund made in October. The IMF predicted a 3.6 percent rise in the global economy in 2017 and 3.7 percent in 2018.
A Turning Point
The numbers suggest the global economy has recovered from the 2008-2009 global economic crisis.
The World Bank predicts this year will “be the first year since the financial crisis that the global economy will be operating at or near full capacity.” Even so, the bank sees potential growth slowing in most economies as productivity and investment evens out and workers retire. And it warns that geopolitical factors still pose a risk.
Growth By Region:
- Growth in East Asia and the Pacific held steady, rising from 6.3 percent in 2016 to 6.4. percent in 2017.
- European and Central Asian economies recovered, rising from 1.7 percent in 2016 to 3.8 percent in 2017.
- Economies in the Middle East and North Africa dipped down from 5.0 percent in 2016 to 1.8 percent in 2017.
- South Asian economies dipped slightly, from 7.5 percent in 2016 to 6.5 percent in 2017.
- The weakest regions, Latin America and the Caribbean and Sub-Saharan Africa grew at 0.9 percent and 2.4 percent in 2017.
(These estimates on based purchasing power parity (PPP) real economic growth.)
Global Trade Up
Despite a political backlash against globalization in developing countries, global trade expanded in 2017. As capital spending on manufacturing grew, trade in goods such as machines, electronics and semiconductors increased. Trade in services also grew, although not as much as it did for goods.
The bank estimates that the increase in trade will moderate at 4 percent growth in 2018. Though that depends whether business investments in advanced economies and China evens out.
For more, see the World Bank report.