World: Africa: World Bank Economic Outlook Puts Global Growth At 2.7 Percent

In a new development, the World Bank (WB) forecasts that world economic increase will strengthen to 2.7 % in 2017. This is as a result of improvements in manufacturing and trade, rising market confidence, and stabilising commodity prices in commodity-exporting emerging markets and developing economies.

The new world development is good news for commodity exporting nations such as Uganda because it will result in increased earnings from commodity exports.

In its updated World Economic Prospects June 2017 released this week in Washington DC, the WB says increase in advanced economies is expected to accelerate to 1.9 % in 2017, which will as well benefit the trading partners of these nations.

The Bank says world financing conditions remain favourable and commodity prices have stabilised. Against this improving international performance, increase in emerging markets and developing economies as a whole will pick up to 4.1 % this year from 3.5 % in 2016.

Increase part the world's seven major emerging economies is estimate to increase and exceed its long-term average by 2018.

WB is optimistic, saying the recovering economic activity in these economies should have significant positive effects for increase in other emerging and developing economies all over the globe.

On other hand, the Bank says: "Nevertheless, substantial risks cloud the outlook. New trade restrictions could derail the welcome rebound in world trade, (and) persistent policy uncertainties could dampen confidence and investment ."

Over the longer term, WB says persistently weak productivity and investment increase could erode long-term increase prospects in emerging markets and developing economies that are key to poverty reduction.

"For too long, we have seen low increase hold back evolution in the fight against poverty, so it is encouraging to see signs that the world economy is gaining firmer footing," the WB Group President Jim Yong Kim, said, adding: "With a fragile but real recovery presently underway, nations should seize this moment to undertake institutional and market reforms that can attract private investment to help sustain increase in the long-term. Nations must as well continue to invest in people and build resilience against overlapping challenges, inclunding climate change, conflict, forced displacement, famine and disease."

The statement as well highlights concern about mounting deficit and deficits part emerging markets and developing economies, raising the prospect that an abrupt rise in interest rates or tougher borrowing conditions may be damaging.

At the end of 2016, government deficit exceeded its 2007 level by additional than 10 % points of Gross Domestic Product (GDP) in additional than half of emerging markets and developing economies and fiscal balances worsened from their 2007 levels by additional than 5 % points of GDP in one-third of these nations.

And for Uganda's situation for the case of financial year 2016/17 net present price to the GDP, was 31 %.

"The reassuring news is that trade is recovering," said the WB chief economist Paul Romer.

He added: "The concern is that investment remains weak. In response, we are shifting our priorities for lending toward projects that can spur follow-on investment by the private sector."

A bright spot in the outlook is a recovery in trade increase to 4 % next a post-financial crisis low of 2.5 % last year.

The statement highlights a key area of weakness in world trade, and trade part firms not linked through ownership.

It stresses that such trade through outsourcing channels has slowed much additional sharply than intra-firm trade in recent years.

"Next a prolonged slowdown, recent acceleration in activity in some of the major emerging markets is a welcome development for increase in their regions and for the world economy," said Mr Ayhan Kose, the Bank's development economics prospects director.

Regions

East Asia and Pacific. Increase is projected to relieve to 6.2 % in 2017 and to 6.1 % in 2018..

Europe and Central Asia. Increase in Europe and Central Asia is estimate to accelerate broadly to 2.5 % in 2017 and to 2.7 % in 2018, supported by continued recovery part commodity exporters.

Latin America and the Caribbean. Increase is projected to strengthen to 0.8 % in 2017 as Brazil and Argentina emerge from recessions. Middle East and North Africa. Increase in the region is projected to fall to 2.1 % in 2017 as the adverse impact of Organisation of the Petroleum Exporting Nations production cuts on oil exporters outweighs modestly improving conditions in oil importers. South Asia. Increase in the region is estimate to pick up to 6.8 % in 2017 and accelerate to 7.1 % in 2018, reflecting a solid expansion of domestic request and exports.

Sub-Saharan Africa. Increase in sub-Saharan Africa is estimate to pick up to 2.6 % in 2017 and to 3.2 % in 2018, predicated on moderately rising commodity prices and reforms to tackle macroeconomic imbalances.