World Bank forecast broad-based recovery for global economy
World Bank on Tuesday raised its forecast for global economic growth in 2018 to 3.1 percent, saying that a broad-based recovery was underway across the world.
The forecast was 0.2 percentage point higher than its projections in June last year, said the Washington-based lender in its flagship Global Economic Prospects report.
"2018 is on track to be the first year since the financial crisis that the global economy will be operating at or near full capacity," said the lender.
It estimated that the global growth reached 3 percent in 2017, the strongest pace since 2011 and a notable recovery from a post-crisis low of 2.4 percent in 2016.
Growth increased in more than half of the world's economies in 2017, highlighting the broad-based nature of the recovery, said the lender.
It expected the global growth to slow to 3 percent in 2019 from 3.1 percent in 2018 and further down to 2.9 percent in 2020.
According to its forecast, growth in advanced economies is expected to moderate slightly to 2.2 percent in 2018 from 2.3 percent in 2017, because major central banks are likely to gradually withdraw from accommodative monetary policies.
With stronger private investment, U.S. economy is estimated to grow 2.3 percent in 2017. The growth is expected to accelerate to 2.5 percent in 2018 and then moderate to an average of 2.1 percent in 2019 and 2020.
The World Bank expected that the tax bill recently approved by the U.S. Congress is expected to boost corporate investment because of the low corporate tax rate and full expensing of new equipment.
However, it warned that the benefits of fiscal stimulus will likely be constrained because the economy is already at near full capacity and the pace of monetary policy normalization might accelerate.