"Resurgent investment spending in advanced economies and an end to the investment decline in some commodity-exporting emerging market and developing economies were important drivers of the uptick in global GDP growth and manufacturing activity [in 2017]", said the report. This is the highest share of countries experiencing a year-over-year growth pickup since 2010.
Global growth is projected to pick up to 3.9% this year and next, supported by strong momentum, favourable market sentiment, accommodative financial conditions, and the domestic and worldwide repercussions of expansionary fiscal policy in the US.
The world's second-biggest economy will continue rebalancing away from investment and manufacturing toward consumption and services, International Monetary Fund said, warning that rising debt clouds the nation's medium-term outlook.
"Once the cyclical upswing and U.S. fiscal stimulus have run their course, prospects for advanced economies remain subdued, given their slow potential growth". Just 5% of money managers project the global economy to be stronger in the next 12 months, the lowest level since June 2016, according to the bank's April survey.
The multilateral lending institution said the balance sheet vulnerabilities in India pose a downside risk to its medium-term growth prospects, requiring policy action.
The worldwide lender remains optimistic about global growth prospects, forecasting a 3.9% increase in 2018, from 3.8% in 2017 but warned that the momentum is likely to be temporary in developed economies.
"While some governments are pursuing substantial economic reforms, trade disputes risk diverting others from the constructive steps they would need to take now to improve and secure growth prospects", he said.
"That major economies are flirting with trade war at a time of widespread economic expansion may seem paradoxical-especially when the expansion is so reliant on investment and trade".
"The IMF welcomed New Zealand's continued support of open trade and our multi-lateral trade framework saying that, as one of the initial signatories of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), New Zealand will benefit from increased market access and new growth opportunities".
"US tax reform will subtract momentum starting in 2020", the International Monetary Fund said.