Global economic growth is likely to speed up this year, after a stronger than expected 2017, according to the World Bank.
The bank's new forecast is that the world economy will expand by 3.1 per cent this year before slowing slightly – the first time since the financial crisis that growth is operating at its full potential.
While the report warned that the upswing will be short-term, with gains in improving living standards and reducing poverty levels at risk long term, prospects for the immediate future seem reasonably upbeat.
The forecast is better than what the bank was expecting in its previous assessment last June.
Among the large economies, the up-rating is especially marked for the Eurozone, though the bank still thinks it will slow somewhat this year, but by less than its previous forecast.
Emerging and developing economies will grow slightly faster than last year in this forecast.
The issue is whether the world economy will have the capacity to maintain decent growth beyond the current upturn; in the bank’s view, there’s little motivation to stimulate further growth with the standard policy tools that work by boosting demand for goods and services.
The bank said governments should promote reforms to improve education and health services and infrastructure, which would lead to more productive workforces and businesses overall.