IMF revises up 2017 global economic forecast

By Ovunc Kutlu

NEW YORK (AA) - The global economy is expected to grow 3.5 percent this year, the International Monetary Fund (IMF) said Tuesday in its World Economic Outlook report.

That figure is up from the previous estimate of 3.4 percent as the bank cited "buoyant financial markets and a long-awaited cyclical recovery in manufacturing and trade under way”. It kept its 2018 global growth forecast unchanged at 3.6 percent.

There are still risks, however, against the world economy, such as low productivity growth, high income inequality, inward-looking policies in advanced economies, and the U.S.'s Federal Reserve raising rates faster than expected.

Expectations for the U.S. economy were left unchanged at 2.3 percent for 2017 and 2.5 percent for the following year, but the IMF revised upwards its forecast for most major economies.

The eurozone is estimated to expand by 1.7 percent in 2017, instead of 1.6 percent, while Germany, France and Italy were each revised up 0.1 points to 1.6 percent, 1.4 percent, and 0.8 percent, respectively. The U.K. is anticipated to grow 2 percent this year, instead of 1.5 percent.

Japan’s forecast was revised up 0.4 points to 1.2 percent. The Russian economy is expected to expand 1.4 percent this year instead of 1.1 percent, while 2017projections for China was raised to 6.6 percent from 6.5 percent.

Turkey's economy is expected to contract to 2.5 percent from 2.9 percent, but the bank kept 2018 forecasts unchanged at 3.3 percent.

Turkey's outlook "is clouded by heightened political uncertainty, security concerns, and the rising burden of foreign-exchange-denominated debt caused by the lira depreciation," the IMF said.