UAE leads growth path

The World Bank predicted that the global economy would grow 3.1 per cent this year - best showing in seven years - as the UAE is poised to rebound with a 3.1 per cent upswing in 2018.

The pace of world growth was expected to moderate to three per cent in 2019 and 2.9 per cent in 2020, the Washington-based bank said in its latest forecast, which it described as a clarion call for public action to prevent growth from slowing.

The bank affirmed that the outlook for the global economy is better than expected - rather than worse - with all regions seeing improved growth.

"The global economy is set to expand by 3.1 per cent in 2018, slightly up from three per cent last year and marking the first year since the 2008 Great Recession that it will near or achieve full growth potential."

"A broad-based cyclical global recovery is underway, aided by a rebound in investment and trade, against the backdrop of benign financing conditions, generally accommodative policies, improved confidence, and the dissipating impact of the earlier commodity price collapse. Global growth is expected to be sustained over the next couple of years - and even accelerate somewhat in emerging market and developing economies thanks to a rebound in commodity exporters," the bank said.

The 189-nation lending organisation cautioned about some risks it sees to the international economy.

While the UAE will be growing at the fastest pace among the GCC countries, in the Middle East and North Africa, the growth is forecast to pick up over the medium term, as reforms across the region gain momentum and as fiscal adjustments ease amid a projected rise in oil prices, the bank said.

In Mena, improved competitiveness and external conditions are expected to further support growth in oil importers. Key risks to the regional outlook are tilted to the downside, including continued geopolitical conflicts and weakness in oil prices," the bank said.

The forecast said China, the world's second-largest economy, would grow 6.4 per cent this year. And it foresees growth of 2.1 per cent in the eurozone.

In India, GDP growth is expected to reach 7.3 per cent in 2018 before strengthening slightly in 2019-20 to 7.5 per cent, the World Bank projected.

The United States saw a smaller upgrade to 2.3 per cent last year and 2.2 per cent this year, while Japan rebounded to 1.7 per cent in 2017 and an expected 1.3 percent this year.

The fastest-growing region in the world is East Asia and the Pacific, according to the report.

In poorer countries in Africa, Latin America, the Middle East and Asia, economic growth is expected to expand to 5.4 per cent in 2018 as commodity prices firm but not as much as previously expected.

Growth in Sub-Saharan Africa is forecast to reach 3.2 per cent this year and 3.5 per cent in 2019, the bank said.

World Bank president Jim Yong Kim cautioned against complacency. He urged policymakers to make needed investments in such areas as education and infrastructure as a way to lift lagging worker productivity and increase future growth.

"If policymakers around the world focus on these key investments, they can increase their countries' productivity, boost workforce participation and move closer to the goals of ending extreme poverty and boosting shared productivity," Kim said.

In an update of its twice-yearly economic report, the World Bank however warned that the economic upswing this year was temporary unless governments adopted policies that would focus on increasing workforce participation.

However, the bank warns that countries must make investments to improve their growth prospects, and the time to do that is before the next economic crisis hits, as it inevitably will.

World Bank economist Ayhan Kose said increasing the ability of countries to grow faster is "the single most important issue for the global economy. The big story is a good story. Global growth will be stronger than what we expected."