Global economic growth to remain favourable

KUALA LUMPUR: The outlook for global economic performance is expected to remain favourable in 2017 and 2018 with growth emanating from advanced and emerging markets and developing economies (EMDEs).

The signs of enhanced momentum in the global economy have recently emerged with world output was forecast to increase to 3.6 per cent in 2017 and 3.7 per cent in 2018 (2016: 3.2 per cent), the Ministry of Finance (MoF) said in its Economic Report 2017/2018 released yesterday.

It said global trade was expected to increase significantly by 4.2 per cent this year and 4.0 per cent in 2018 (2016: 2.4 per cent), attributed to higher investment and industrial activities.

The report said growth in advanced economies was supported by an upturn in the United States, Euro area and Japan, following improving investment and exports.

“Meanwhile, growth in EMDEs has strengthened further, attributed to firming commodity prices, recovering industrial activity, stabilising investment and improving confidence,” the

Meanwhile, growth in EMDEs has strengthened further, attributed to firming commodity prices, recovering industrial activity, stabilising investment and improving confidence. MoF

MoF said.

The report said global trade firmed up since mid-2016 and was expected to outpace world gross domestic product growth after two years of marked slowdown.

Futhermore, it said international financial conditions remained benign and headline inflation had picked up due to higher commodity prices.

The report said the oil prices were firming up supported by strong activity and expectations of more robust global demand, coupled with agreed restrictions on oil supply.

“According to the World Bank, for 2017, oil prices are expected to increase by 23.8 per cent to reach an average of US$53 per barrel (pb) and to improve further by 5.7 per cent to US$56 pb next year,” it added.

Even though a synchonised global economic recovery is underway, reflected by various multi-year high in selected economic data, the report said risks to growth remained tilted to the downside, including rising protectionism, heightening policy uncertainties in major advanced economies and slowing productivity growth and geopolitical tension in some EMDEs.

Nevertheless, expansionary fiscal policy in major economies is expected to provide impetus for global growth, the MoF added. — Bernama