Global economic activity continues to firm up. Global output is estimated to have grown by
3.7 percent in 2017, which is 0.1 percentage point faster than projected in the fall and ½
percentage point higher than in 2016. The pickup in growth has been broad based, with notable
upside surprises in Europe and Asia. Global growth forecasts for 2018 and 2019 have been
revised upward by 0.2 percentage point to 3.9 percent. The revision reflects increased global
growth momentum and the expected impact of the recently approved U.S. tax policy changes.
The U.S. tax policy changes are expected to stimulate activity, with the short-term impact in the
United States mostly driven by the investment response to the corporate income tax cuts. The
effect on U.S. growth is estimated to be positive through 2020, cumulating to 1.2 percent through
that year, with a range of uncertainty around this central scenario. Due to the temporary nature
of some of its provisions, the tax policy package is projected to lower growth for a few years
from 2022 onwards. 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.