Global economic growth has strengthened in the last six months, in line with the forecasts reported in the World Economic Situation and Prospects 2017. Helped by a moderate recovery in trade and investment, world gross product is expected to expand by 2.7 per cent in 2017 and 2.9 per cent in 2018. While this marks a notable acceleration compared to 2016, growth in many regions remains below the levels needed for rapid progress towards achieving the Sustainable Development Goals.
Underpinning the global economic recovery is firmer growth in many developed economies. Prospects for many economies in transition have also strengthened, while East and South Asia remain the world’s most dynamic regions. However, the outlook for some developing regions has deteriorated since January. Prospects for Africa, in particular, raise concerns. Gross domestic product (GDP) per capita declined in Central, Southern and West Africa last year, with negligible per capita growth anticipated in 2017-2018.
Indeed, for some of the world’s poorest countries, downward revisions to forecasts raise particular concerns for the implementation of the 2030 Agenda for Sustainable Development. A rebound in confidence and more upbeat economic sentiment suggest that perceptions of risks have diminished in recent months. Nonetheless, this optimism has not yet translated into significant gains in the real economy, and a high degree of uncertainty in the international policy environment continues to cloud the outlook. In many emerging economies, the corporate sector remains vulnerable to sudden changes in financial conditions and destabilizing capital outflows.
There is a significant risk that the expectations underpinning buoyant global economic sentiment may be disappointed, leading to a sharp reversal of confidence. As global commitments to deeper international policy coordination appear to be waning, renewed efforts are needed to ensure progress in key areas of global importance, including aligning the multilateral trading system with the 2030 Agenda for Sustainable Development; expanding international public finance and official development aid; supporting climate finance and clean technology transfer; and addressing the challenges posed by large movements of refugees and migrants.