General assembly of the world Bank, October 9, 2017 Washington, d.c. (Photo JIM WATSON. AFP)
The world Bank is more optimistic on economic growth around the globe this year but she remains reserved on the ability of the long-term support in the face of the temptation of protectionism and geopolitical tensions.
The gross domestic product (GDP) worldwide is expected to grow 3.1% this year, after + 3% in 2017. This is 0.2 percentage point higher than its forecast in June for 2018.
“Global growth is stronger than what we had expected”, said to AFP Ayhan Kose is an economist at the world Bank, which has increased by 0.3 point in her assessment of the expansion for the last year.
And 2018 has “good chances” to be the first year since the financial crisis where the global economy will be running at full speed, or almost, has noted the expert, the principal author of this half-yearly report on the international situation.
The growth is driven by investment, manufacturing and trade, while the countries exporting raw materials benefit from a firming up of prices, summarizes the institution based in Washington dc.
The improvement also benefits to all regions of the world, starting with the “big three”: the United States, the euro area and Japan, observes Ayhan Kose.
According to these new projections, the United States should see their economic growth accelerate to 2.5% from 2.2% expected in June. The euro area GDP is expected to grow from his side of 2.1%. As for Japan, growth is expected to 1.3%.
The world Bank, which provided for a slight slowdown of the growth of China in 2017, the committee had ultimately felt that it had accelerated 0.1 percentage point to 6.8%, and assumes a slight deceleration this year to 6.4%. And the other giant, India is expected to see its growth to rebound to 7.3% in 2018 from 6.7% in the past year.
The two large emerging countries, Brazil and Russia, which were renewed in 2017, with growth (+1.7% and +1%) after two years of recession, should continue their recovery, with respective increases expected 1.7% and 2% in 2018.
“The recovery of global growth is encouraging, but it is not the time for complacency,” warned the world Bank president Jim Yong Kim. Because a tightening sharply as global financial conditions could jeopardize the expansion.
– Trade Sanctions-us
The world Bank estimates that “the intensification of trade restrictions and the rise of geopolitical tensions could undermine confidence and dampen economic activity”. These comments are designed implicitly to the commercial policy of the administration to Trump, particularly with respect to China, as well as exacerbated tensions between the United States and North Korea.
The us president had promised during his campaign a net tightening of commercial policy of the United States to preserve jobs and support american businesses.
For the past year, the u.s. department of Commerce has multiplied the customs penalties preliminary or final as on the wood of canadian construction, and aluminium foil steel, chinese or Spanish olives and biodiesel from Argentina and Indonesia.
This aggressive policy has elicited the wrath of Canada and China, which has threatened to retaliate.
Donald Trump has also imposed the renegotiation of the treaty of free trade in north america (Nafta) uniting the United States, Mexico and Canada, wielding the threat of going out purely and simply out of this agreement.
In addition to the caution against a trade-policy protectionist, the world Bank urges governments to seize the opportunity of a period of growth to undertake reforms. They should promote education and quality health services and improve infrastructure to boost growth potential, particularly in emerging and developing countries.
Because, like all periods of expansion, it will be completed at a certain time, “history repeats itself”, stressed Ayhan Kose. Since the 1970s, there was a crisis per decade, he recalled.
Early this year, “we hope that leaders will have good resolutions”, he added beyond the traditional monetary and fiscal instruments to stimulate growth in the short term.
For his part, Jim Yong Kim encouraged “to invest in the human to increase the productivity and the ageing of the population weighs on the growth potential. He was finally invited to improve the participation of workers in the job market for the benefit of the prosperity for the greatest number.