Washington – Global economic growth is forecast to accelerate moderately to 2.7 percent in 2017 after dropping to its lowest levels during 2016, the World Bank said in its latest report. Growth rates are expected to improve to 3.1% in the Middle East and North Africa – compared to 2.7% in 2016, whole oil producing countries will witness the higher share of growth.
The World Bank expected GCC countries to reach a growth of 1.6%, with oil importers registering the strongest gains.
Among oil exporters, Saudi Arabia is predicted to accelerate modestly to a 1.6 in 2017.
The report states that Algeria’s growth rate will drop to 2.9% because of the recessed expenditure on public works and delays in implementing reforms in support-systems. As per importers of oil in the Middle East, the bank expected growth rate in Egypt to regress from 4.3% to 4% during 2017, amid the implementation of financial regulation measures and the reduction of consumption rates drove by the growing inflation, however, the report said that Egypt will see an economic recovery during 2018 and growth that would reach 5.1%.
In Morocco, the World Bank expected recovery and growth improvement to reach 4% boosted by the agricultural sector, as per Jordan, the recovery of investments and exports will raise the country growth rate to 2.6 this year.
The report however stated that growth rates in the Middle East are surrounded by dangers amid continuance of drop in oil prices and ascension of conflicts and terrorism – swings of oil prices might weaken governmental expenditure and resources of public revenues.
The report stated that failure of cease fire in Syria, the ongoing war in Yemen, battles against ISIS in Iraq – along with the political crisis in Libya are expected to negatively affect the growth.
The World Bank report predicted the global economy to hike with the recession of difficulties facing the developing countries exporters of raw materials in the emerging markets. The report further expected growth rates in these countries to reach 1.8% during 2017 saying that programs of financial incentives in developed countries, mainly the United States, will contribute in achieving domestic and global growth, however, exaggerated measures of commercial protection will have their negative effects.
Growth in developing countries and emerging markets is expected to raise to 4.2% in 2017 with a slight increase in the raw materials prices.
The report seemed uncertain the future of policies adopted in major countries in the world. “After years of disappointing global growth, we are encouraged to see stronger economic prospects on the horizon,” World Bank Group President Jim Yong Kim said, “Now is the time to take advantage of this momentum and increase investments in infrastructure and people.” “This is vital to accelerating the sustainable and inclusive economic growth required to end extreme poverty,” he added.
The report analyzes the worrisome recent weakening of investment growth in emerging market and developing economies, which account for one-third of global GDP and about three-quarters of the world’s population and the world’s poor. Investment growth fell to 3.4 percent in 2015 from 10 percent on average in 2010, and likely declined another half percentage point last year.
World Bank Chief Economist Paul Romer said: “we can help governments offer the private sector more opportunities to invest with confidence that the new capital it produces can plug into the infrastructure of global connectivity”.
“Because of the outsize role the United States plays in the world economy, changes in policy direction may have global ripple effects. More expansionary U.S. fiscal policies could lead to stronger growth in the United States and abroad over the near-term, but changes to trade or other policies could offset those gains,” said World Bank Development Economics Prospects Director Ayhan Kose.