## A Firming Recovery _IMF Blog, July 24, 2017_ ## Source details **Canonical URL:** [A Firming Recovery](https://www.imf.org/en/blogs/articles/2017/07/24/a-firming-recovery) ## Other formats - [Markdown version](/en/blogs/articles/2017/07/24/a-firming-recovery/index.md) - [Structured JSON version](/en/blogs/articles/2017/07/24/a-firming-recovery/index.json) - [Bundle manifest](/en/blogs/articles/2017/07/24/a-firming-recovery/bundle-manifest.json) ## Bibliographic details - Authors: Maurice Obstfeld - Published: July 24, 2017 --- ### Overview - The recovery in global growth projected in April "is on a firmer footing; there is now no question mark over the world economy’s gain in momentum." - "As in our April forecast, the World Economic Outlook Update projects 3.5 percent growth in global output for this year and 3.6 percent for next." - The distribution of growth has shifted: "some economies are up but others are down, offsetting those improvements." ### Growth projections and notable country/region developments - Global: - World Economic Outlook Update projects "3.5 percent growth in global output for this year and 3.6 percent for next." - World trade growth has picked up, with volumes projected to grow faster than global output in the next two years. - Euro area: - Forecast raised compared with recent projections; performance is "notable compared with the not-too-distant past." - Japan, China, and emerging and developing Asia: - Projections raised for Japan and for China, and for emerging and developing Asia more generally. - Emerging and developing Europe and Mexico: - Notable improvements observed. - United States: - Forecasts for both 2017 and 2018 reduced to "2.1 percent" because near-term U.S. fiscal policy looks less likely to be expansionary than believed in April. - "This pace is still well above the lacklustre 2016 U.S. outcome of 1.6 percent growth." - Over the next two years, "U.S. growth should remain above its longer-run potential growth rate." - United Kingdom: - Projection for this year is lowered "based on the economy’s tepid performance so far." - "The ultimate impact of Brexit on the United Kingdom remains unclear." - Latin America: - Projections for the region lowered over the next two years; the region "still struggles with sub-par growth." - Sub-Saharan Africa: - Growth this year is projected to be higher than last year, but "remains barely above the population growth rate, implying stagnating per capita incomes." - Commodity exporters and lower-income countries: - Continued weakness as they "continue to adjust to reduced terms of trade." ### Risks (near-term and medium-term) - Upside risk: - "Possibility of even stronger growth in continental Europe, as political risks have diminished." - Downside risks: - Many emerging and developing economies receiving capital inflows at favorable borrowing rates, possibly leading to "risks of balance of payments reversals later." - Strains could emerge if advanced economy central banks "show an increasing preference for monetary tightening." - Core inflation pressures remain low in advanced economies and measures of longer-term inflation expectations show "no indications of upward drift beyond targets." - Recommendation for central banks: "proceed cautiously based on incoming economic data, reducing the risk of a premature tightening in financial conditions." - China: - Supportive policy has promoted recent high growth; IMF upgraded 2017 and 2018 forecasts for China "by 0.1 and 0.2 percentage point, respectively, to 6.7 and 6.4 percent." - Higher growth comes at the cost of "continuing rapid credit expansion and the resulting financial stability risks." - Positive note: "China’s recent moves to address nonperforming loans and to coordinate financial oversight therefore are welcome." - Protectionism and geopolitical risk: - "The threat of protectionist actions and responses remains salient in the near and medium terms, as do geopolitical risks." ### Longer-term outlook and policy recommendations - Long-term growth: - "Despite the current improved outlook, longer-term growth forecasts remain subdued compared with historical levels, and tepid longer-term growth also carries risks." - Advanced economies: - "Median real incomes have stagnated and inequality has risen over several decades." - "Even as unemployment is falling, wage growth still remains weak." - Slow growth risks "exacerbating social tensions that have already pushed some electorates in the direction of more inward-looking economic policies." - Emerging economies: - "Despite generally higher inequality than in advanced economies, substantial income gains have accrued even to those low in the income distribution." - Policy actions while cyclical upswing persists: - "Suitable structural reforms can raise potential output in all countries, especially if supported by growth-friendly fiscal policies including productive infrastructure investment, provided there is room in the government budget." - "Investment in people is critical—whether in basic education, job training, or reskilling programs." - These measures will "increase labor markets’ resilience to economic transformation and raise potential output." - Policies to help adjust to globalization (as described in the recent report co-authored with the World Bank and World Trade Organization) are "more broadly necessary to meet the challenges of technology and automation." - Multilateral cooperation: - "Strengthening multilateral cooperation is another key to prosperity, in a range of areas including trade, financial stability policy, corporate taxation, climate, health, and famine relief." - Warning: "Where domestic developments have a strong international impact, policies based narrowly on national advantage are at best inefficient and at worst highly damaging to all." *Maurice Obstfeld, July 24, 2017 — A Firming Recovery* --- ## Content in this bundle - **复苏企稳, 作者：莫里·奥伯斯费尔德, 2017 年7 月24 日** - [复苏企稳, 作者：莫里·奥伯斯费尔德, 2017 年7 月24 日 (Markdown version)](/external/chinese/np/blog/2017/072417c.pdf.md){rel="alternate" type="text/markdown"} - [复苏企稳, 作者：莫里·奥伯斯费尔德, 2017 年7 月24 日 (PDF)](/external/chinese/np/blog/2017/072417c.pdf){rel="external" type="application/pdf"} - **回復は;底堅い; モーリス・オブストフェルド IMFブログ, 2017年7月24日掲載** - [回復は;底堅い; モーリス・オブストフェルド IMFブログ, 2017年7月24日掲載 (Markdown version)](/external/japanese/np/blog/2017/072417j.pdf.md){rel="alternate" type="text/markdown"} - [回復は;底堅い; モーリス・オブストフェルド IMFブログ, 2017年7月24日掲載 (PDF)](/external/japanese/np/blog/2017/072417j.pdf){rel="external" type="application/pdf"} - **Sebuah Pemulihan yang Menguat, By Maurice Obstfeld, 24 Juli, 2017** - [Sebuah Pemulihan yang Menguat, By Maurice Obstfeld, 24 Juli, 2017 (Markdown version)](/external/lang/indonesian/np/blog/2017/072417i.pdf.md){rel="alternate" type="text/markdown"} - [Sebuah Pemulihan yang Menguat, By Maurice Obstfeld, 24 Juli, 2017 (PDF)](/external/lang/indonesian/np/blog/2017/072417i.pdf){rel="external" type="application/pdf"} - **Набирающее силы восстановление, Морис Обстфельд, 23 июля 2017 года** - [Набирающее силы восстановление, Морис Обстфельд, 23 июля 2017 года (Markdown version)](/external/russian/np/blog/2017/072417r.pdf.md){rel="alternate" type="text/markdown"} - [Набирающее силы восстановление, Морис Обстфельд, 23 июля 2017 года (PDF)](/external/russian/np/blog/2017/072417r.pdf){rel="external" type="application/pdf"} --- ## References - [عربي](https://blog-montada.imf.org/?p=5521) - [https://www.imf.org/wp-content/uploads/2017/07/BLOG-1024x600-WEOUpdateJuly2017-Global-Economy-chart.jpg](https://www.imf.org/wp-content/uploads/2017/07/BLOG-1024x600-WEOUpdateJuly2017-Global-Economy-chart.jpg) - [World Economic Outlook Update](http://www.imf.org/en/Publications/WEO/Issues/2017/07/07/world-economic-outlook-update-july-2017) - [report](https://www.imf.org/en/Publications/Policy-Papers/Issues/2017/04/08/making-trade-an-engine-of-growth-for-all) - [https://www.imf.org/wp-content/uploads/2017/07/weo-table.jpg](https://www.imf.org/wp-content/uploads/2017/07/weo-table.jpg) _Source: https://www.imf.org/en/blogs/articles/2017/07/24/a-firming-recovery_