Thailand growth higher in 2017 with global recovery

Long global trend of slow global growth set to end with rising commodity prices, interest rates likely to rise also.

ECONOMY 

Higher global growth to increase Thailand's growth in 2017  

Reuters News agency

11/01/2017

Global growth is expected to accelerate slightly in 2017 as recovering oil and commodity prices ease pressures on emerging market commodity exporters and painful recessions in Brazil and Russia come to an end.

This is according to the World Bank's latest Global Economic Prospects report (download for free here). 

LONG TREND OF SLOW GROWTH TO CHANGE THIS YEAR 

The World Bank expected 2017 real gross domestic product (GDP) growth worldwide to rebound to 2.7% from a post-financial crisis low of 2.3% last year.

Growth in advanced economies is expected to edge up to 1.8% in 2017 from 1.6% in 2016, while emerging economies and developing countries will see growth accelerate to 4.2% this year from 3.4% last year.

"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 in a statement.

"Now is the time to take advantage of this momentum and increase investments in infrastructure and people," he said.

WILD CARD FACTORS CREATE UNCERTAIN OUTLOOK 

However, there was considerable uncertainty surrounding the forecasts.

The forecasts do not incorporate the effects of various policy proposals from US President-elect Donald Trump.

These policies are expected to include increased fiscal stimulus from tax cuts and infrastructure spending, and a more protectionist international trade stance. 

HIGHER INTEREST RATES WITH HIGHER US GROWTH EXPECTED

The World Bank forecasts 2017 US growth at 2.2% compared with 1.6% in 2016, but the increase could be considerably larger -- and have effects far beyond the US.

"A surge in US growth -- whether due to expansionary fiscal policies or other reasons -- could provide a significant boost to the global economy," the bank said.

However, this could lead to higher interest rates and tighter financial conditions that would have adverse effects on some emerging market countries that depend heavily on external financing from outside their countries. 

It added that lingering uncertainty over the course of US economic policy could weigh on global growth by keeping investment money on the sidelines until there is more policy clarity.

SLOW CHINA GROWTH, FASTER THAI GROWTH 

The World Bank said China's growth would continue to slow, easing to 6.2% in 2017 from 6.7% in 2016, but growth would edge higher in some Southeast Asian economies, including Thailand and Indonesia.

India's strong growth is expected to accelerate, rising to 7.6% in 2017 from 7% in 2016 as reforms ease domestic supply bottlenecks and increase productivity.

http://www.bangkokpost.com/business/world/1178133/world-bank-sees-higher-2017-global-growth

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