The growth projection of the UK economy has received a 1.7% upgrade by the World Bank this year.
According to a global prospects report given by the bank today, there is an expectation that the improved global growth will increase at a good rate and get to 2.7% in the next three years and this grow is expected to boost the
British economy as a whole.
In comparison to last year’s growth of 1.8%, this year’s 1.7% growth rate for the economy in the UK would just be lower with a small margin, but would still be higher compared to the projection in January this year which had been set at a growth rate of about 1.2%.
This year, there is an expectation of 1.7% increase in the Euro section, which is a slight decline from 1.8% in the last year and there is also an expected growth of about 1.5% in 2018 and 2019 in both the UK and the Euro economic area.
A 1.9% growth rate has been projected for the more advanced economies and those who stand to gain from this kind of growth include the business allies of these countries.
According to the World Bank’s Global Economic prospects for June 2017, the assumption is that the global financial environment stays positive and without any major hitches and there is stabilization in the prices of goods.
An economist with the World Bank, Franziska Ohnsorge stated that the highly open UK economy was set to be delicate and sensitive to advancement and improvement in the international economy in the coming years, and at the same time, there was a forecasted increase in the Eurozone which was expected to boost the growth in the UK economy. This is despite of the doubts and reservations surrounding the discussions of Brexit.
At the same time, the World Bank cautions that there are still risks involved some of which include the Brexit discussions and negotiations.
According to the Global Economic prospects report, there are several risks involved in the negotiations regarding the United Kingdom exiting from the European Union which will have a serious impact on the UK’s economy
If worst case scenario was to come into play and the uncertainties surrounding Brexit carries on, it would affect the confidence of investors in a negative way and as such, will reflect negatively on the recovery of the economic growth, causing it to slow down and possibly revert.
However, the World Bank has kept a positive hope for the growth prospects of the global economy.
According to Paul Romer, who is the World Bank chief economist, there was some sense of reassurance that the trade was well on the recovery path.
In his statement, he continued to say that the major concern is that the investment continued to be weak. To counter this, the World Bank is re-looking at their priorities and shifting them to giving loans and grants for projects and ventures that can facilitate and provide incentives for continued and progressive investment by the individuals and firms in the private sector.