Global economy is projected to grow by 3.9 percent in 2018 and 2019, up from the previous estimate of 3.7 percent, the International Monetary Fund (IMF) announced Monday.
'The revision reflects increased global growth momentum and the expected impact of the recently approved U.S. tax policy changes,' the IMF said in its World Economic Outlook Update report.
After expanding by 3.2 percent in 2016, the global economy grew by 3.7 percent in 2017, according to the report.
'The U.S. tax policy changes are expected to stimulate activity ... The effect on U.S. growth is estimated to be positive through 2020,' the report said.
The IMF now expects the U.S. economy to grow by 2.7 percent this year and 2.5 percent next year, up 0.4 and 0.6 percentage points, respectively, from October projections.
The U.S. President Donald Trump's administration passed a new tax reform law last month that would boost companies' earnings, wages and increase domestic growth.
The positive effect of the tax reform is expected to spillover to the U.S.' major trading partners -- Canada and Mexico, the IMF said.
Canada is now anticipated to grow by 2.3 percent and 2 percent in 2018 and 2019, respectively, up by 0.2 and 0.3 percentage points from previous estimates.
Mexico's growth projection is also revised up by 0.4 percent and 0.7 percent for this year and the next, respectively, to 2.3 percent and 3 percent.
The Euro area is expected to grow by 2.2 percent in 2018 and 2 percent in 2019, up from the previous projections of 0.3 percent for both years.
Among major European economies, Germany, Spain and France are expected to grow by 2.3 percent, 2.4 percent and 1.9 percent, respectively, this year.
However, the U.K.'s growth projection for 2019 was lowered down 0.1 percentage point to 1.5 percent due to the potential negative impact of Brexit.
The growth projection for Saudi Arabia, the world's biggest crude oil exporter, was revised up significantly as 'stronger oil prices are helping a
recovery in domestic demand in oil exporters,' the report said.
The IMF now expects the Kingdom's economy to grow by 1.6 percent this year and 2.2 percent next year, up 0.5 and 0.6 percentage points, respectively, from October's projections.
China's growth estimate was revised up by 0.1 percentage points to 6.6 percent for 2018, and to 6.4 percent for 2019.
Russian economy is anticipated to grow by 1.7 percent this year and 1.5 percent next year, according to the IMF.
The growth forecast for emerging market and developing economies was kept unchanged from the previous report, and is now expected to grow by 4.9 percent in 2018 and 5 percent in 2019.
Advanced economies are forecast to expand by 2.3 percent and 2.2 percent in 2018 and 2019, respectively, up 0.3 and 0.4 percentage points from previous estimates.
By Ovunc Kutlu in New York
Anadolu Agency
energy@aa.com.tr