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International Monetary Fund raises global growth forecast

The International Monetary Fund revised global growth upward as an accelerating cyclical upswing boosts a number of regions and countries.

The IMF said in its latest World Economic Outlook that global growth is now forecast at 3.6% for 2017, up from 3.5% in its July update. For 2018, the IMF projects global growth at 3.7%, also up 1 percentage point over the period.

In a blog post on the IMF website, Maurice Obstfeld, economic counselor and director of research at the IMF, wrote that the forecasts are "well above 2016's global growth rate of 3.2%, which was the lowest since the global financial crisis."

Most of the upgrade for 2017 is related to brighter prospects for advanced economies, whereas 2018's revision upward is largely attributable to developing economies playing a bigger role in global growth.

Advanced economies are forecast to grow 2.2% in 2017, up from a 2% projection in the July update; and 2% growth for 2018, up from 1.9% previously.

The U.S. forecast was upgraded to 2.2% for 2017 and 2.3% for 2018, up from 2.1% for each year in the July update. Eurozone growth is projected at 2.1% for 2017, up from 1.9% in the previous update, and 1.9% for 2018, up from 1.7%. Japan's 2017 forecast was upgraded to 1.5% from 1.3%; and to 0.7% for 2018, up from 0.6% in July's update.

Developing economies' growth was kept at 4.6% for 2017, but upgraded to 4.9% for 2018, up from 4.8% in the July update.

"The current global acceleration is also notable because it is broad-based — more so than at any time since the start of this decade. This breadth offers a global environment of opportunity for ambitious policies that will support growth and raise economic resilience in the future. Policymakers should seize the moment; the recovery is still incomplete in important respects, and the window for action the current cyclical upswing offers will not be open forever," wrote Mr. Obstfeld.

He added that a three-pronged approach is necessary, considering structural reforms, fiscal policy and monetary policy.

The October update is available on the IMF website.