For the first time in many years, the World Bank's outlook for the global economy is better than expected rather than worse, with all regions seeing improved growth, according to its latest forecast released Tuesday.
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.
"The big story is a good story. Global growth stronger than what we expected," World Bank economist Ayhan Kose told AFP, noting that all the forecasts are better than those in the June edition of the Global Economic Prospects report.
Kose, who heads the World Bank's Development Prospects Group -- which twice a year prepares the global economic forecasts -- notes that the world is seeing "highly synchronized" economic expansion across regions.
That includes solid growth in the "big three" advanced economies -- the United States, the eurozone and Japan -- and improvements in the important emerging market economies.
In addition, large commodity exporting economies like Russia and Brazil -- that were struggling and saw their economies contract in 2016 -- recovered last year.
Since the last forecast in June, the World Bank has upgraded nearly all of its forecasts, with global economic growth now expected to rise to 3.0 percent for 2017, three-tenths of a point higher than the prior estimate. Growth is expected to hit 3.1 percent this year, and 3.0 percent in 2019.
The biggest gains are in advanced economies, which were revised up four-tenths for 2017 and 2018, to 2.3 percent and 2.2 percent, respectively.
But for 2019 and 2020, those economies are seen slowing to 1.9 percent and 1.7 percent, the report said.
Euro area growth was revised up 0.7 points to 2.4 percent in 2017, and another 0.6 points to 2.1 percent for 2018.
The United States saw a smaller upgrade to 2.3 percent last year and 2.2 percent this year, while Japan rebounded to 1.7 percent in 2017 and an expected 1.3 percent this year.The report raised its forecast for China in 2017 by three-tenths to 6.8 percent, and sees 6.4 percent GDP expansion this year.The efforts by central banks to keep interest rates low has helped stabilize the global economy and fueled the recovery, Kose said in an interview.
However, "downside risks continue dominating the outlook," he cautioned.
He warned that "history will repeat itself," and like all recoveries, "this expansion will end at some point."
Risks include rising debt levels, which are more concerning given that central banks are beginning to raise interest rates and could do so more quickly if the recovery starts to ignite inflation, Kose said.
Another risk is the "escalating trade restrictions."
While Kose did not specifically name the United States, President Donald Trump has taken a very aggressive stance on trade policy.