Overview
After reaching 3.1 percent in both 2017 and 2018, global growth is expected to decelerate over the next two years as global slack dissipates, major central banks remove policy accommodation, and the recovery in commodity exporters matures. Amid moderating international trade and tightening global financing conditions, growth in emerging market and developing economies (EMDEs) is projected to plateau, reaching 4.7 percent in 2019 and 2020, up from 4.5 percent in 2018.
Global Outlook
Global growth is expected to edge down over the next two years, as global slack dissipates, trade and investment moderate, and financing conditions tighten. In EMDEs, growth in commodity importers is expected to remain robust, while the rebound in commodity exporters is projected to mature. Risks to the outlook are tilted to the downside, including the possibility of disorderly financial market movements, escalating trade protectionism, heightened policy uncertainty, and rising geopolitical tensions. EMDE policymakers need to rebuild monetary and fiscal policy buffers and boost potential growth by promoting competitiveness, adaptability to technological change, and trade openness.
Regional Outlooks
Growth in EMDEs is projected to reach 4.5 percent in 2018, before stabilizing at 4.7 percent in 2019-20. The ongoing cyclical recovery in most EMDE regions with a substantial number of commodity exporters is expected to continue in the near term, but mature thereafter as commodity prices level off. Robust growth in EMDE regions with large numbers of commodity importers is projected to continue. A close look at the economic outlook for each region follows.
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