International Monetary Fund raises global growth forecast due to increased growth momentum

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At the release of the Update in Davos, IMF head Christine Lagarde said that for the world economy, "all signs point to a further strengthening both this year and next", but cautioned that "complacency would be a mistake".

The IMF said it saw "a stronger push from external demand" and from exports on the Italian economy. "The effects of the package on output in the United States and its trading partners contribute about half of the cumulative revision to global growth over 2018-19". The IMF said it was the "broadest synchronized global growth upsurge since 2010" when the world enjoyed a strong, but ultimately fleeting, snapback from the financial crisis. "The recent USA tax legislation will contribute noticeably to US growth over the next few years, largely because of the temporary exceptional investment incentives that it offers".

Global growth forecast for 2018 and 2019 have been revised upward by 0.2 percentage point to 3.9 percent.

The U.S. tax overhaul, particularly corporate income tax cuts, and associated fiscal stimulus will likely promote investment and improve the country's performance temporarily, driving up its demand for imports and benefiting trading partners such as Canada and Mexico, the International Monetary Fund said. Then, the International Monetary Fund predicted the economies of the CIS countries to grow by 2.1 percent in 2018.

Among other things, Trump's proposed law cut the corporate tax rate from 35% to 21% permanently, and to lower taxes for about 70% of the middle-class families until 2026.

"The current cyclical upswing provides an ideal opportunity for reforms".

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Last year's slowdown has been blamed on the squeeze on consumers caused by higher inflation - largely the result of the pound's plunge after the Brexit vote - as well as uncertainty over Britain's future outside the EU.

She warned that there were risks ahead as well and called on world leaders to tackle debt and hard problems from inequality to climate change while they had the advantage of growth.

"We should certainly appreciate this season of broad-based growth momentum", she said.

Risks to the global growth forecast appear broadly balanced in the near term, but remain skewed to the downside over the medium term. At a time of widespread economic euphoria, with upward revisions of prospects for world economy and Europe in particular, Spain is only developed economy that has reduced its growth prospects. "Multilateral cooperation remains vital for securing the global recovery", it said.

At that time the IMF's director general said that the UK's economic performance since the Brexit vote in June 2016 had vindicated the Fund's pre-referendum warnings. In an environment of financial market optimism, ensuring financial resilience is imperative, the report said.