The immediate future of the global economy looks good, according to the latest report from the International Monetary Fund (IMF).
The IMF has found that the recent upturn in international trade is led by growth in Europe and Asia.
The IMF also believes that the recent reduction in the corporate tax rate in the US will lead to increased business investment and economic stimulation.
Recent tax reforms brought in by the Trump administration in the US will also lead to more economic activity.
According to the report, as many as 120 nations – representing around three quarters of world trade – saw an improvement in economic activity during the last year, with both developed and emerging economies enjoying growth. This represents the widest global increase in growth since 2010.
Although the upturn was spread around the globe, the IMF singled out Asia and Europe as areas displaying the most significant and surprising growth. Their positive outlook is bolstered by a number of business surveys that indicate that manufacturing output will remain strong.
According to the IMF, the potential significant impact of the US tax reforms for the US and its wide network of trading partners will account for around half of the revised growth prediction for 2018 and 2019. The IMF estimates that the cumulative effect of this growth up to 2020 will be around 1.2 per cent, though the temporary nature of some of the US tax reforms leads them to predict a slower rate of growth after 2022.
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