A positive shift in the world economy in the second half of last year prompted the International Monetary Fund (IMF) to leave unchanged its projections for higher global growth in 2017 and 2018, it announced Monday. Global growth is projected to be 3.4 per cent this year and 3.6 per cent in 2018, the IMF said in its quarterly report. Both projections are faster that the estimated 3.1-per-cent global growth rate last year, the weakest since 2008-09. The IMF said the outlook for advanced economies has improved, reflecting somewhat stronger activity in the second half of 2016 in the United States, as well as a projected fiscal stimulus there. The primary factor underlying the strengthening global outlook however is a projected pickup in growth in emerging markets and developing economies. "Much of the better growth performance we expect this year and next stems from improvements in some large emerging market and low-income economies that in 2016 were exceptionally stressed," said Maurice Obstfeld, chief economist of the Washington-based crisis lender. "Compared to our view in October, we now think that more of the lift will come from better prospects in the United States, China, Europe and Japan," Obstfeld said. The report notes that activity rebounded strongly after a weak first half in the US, which the IMF said is now approaching full employment. It cites the US and Germany as among the advanced economies that are now operating close to full capacity. The report warns of a "wide dispersion of possible outcomes" given uncertainty surrounding the policies of US president-elect Donald Trump, who takes office Friday. Trump made trade a major theme during his campaign and pledged to spend money improve US airports, roads, bridges and other infrastructure.
