World economy likely to grow more than 3 percent this year, says Shanghai think-tank

The world economy is likely to grow more than 3 percent this year after it expanded a better-than-expected 2.9 percent  in 2017, the Shanghai Academy of Social Sciences said in its world economic report released today.

The academy estimated the world economy to grow 3.12 percent in 2018 and 3.31 percent in 2019, while China's gross domestic product may expand 6.7 percent this year.

The academy based its forecast on a recovery in the US, Japan and the eurozone, as well as stable expansion in emerging markets like China which contributed one third to the global growth.

“The world economic performance is set to improve with developed countries gradually moving out of the shadow of the 2008 global financial crisis,” said Quan Heng, director of the Institute of World Economy under SASS.

The growth in the US is predicted to be 2.4 percent for this year, and the eurozone may grow 1.94 percent. Japan may achieve a growth of 1.1 percent amid strong imports and consumption demand.

The report, however, cautioned that potential geopolitical crisis, uncertainties of interest rate increases in the US and its tax reform, trade conflict, and industrial transformation arising from technologies like artificial intelligence are predicted to impact the world economy profoundly this year.

On a brighter note, the Belt and Road initiative, proposed by President Xi Jinping, is set to inject new growth into the world economy, the report said.