The IMF, in its World Economic Outlook, raised the global economic outlook for 2017 to 3.6% and to 3.7% for 2018. This was a slight upgrade from the previous estimates of 3.5% and 3.6% respectively. The IMF's World Economic Outlook report is released twice a year.

In its report, the IMF said that the global economy had strengthened and was broad-based. However, the growth remains incomplete, the report cautioned as it cited low wage growth and challenges from commodity exporters.

IMF calls out the UK. Forecasts lowered

The IMF called out the UK calling it a "notable exception" to a globally improving economy. The IMF cut the long-term forecasts for the UK noting that the side-effects of Brexit were starting to show.

According to the institution, the IMF expects UK's growth outlook to rise just 1.7%, down from 1.9% previously. The revised forecasts put the UK trailing Greece in the next five year period. On the contrary, the IMF forecast growth rate of 11.5% for Greece in the five year period with the UK estimated at 10.3%.

For the year 2017, the IMF lowered the growth forecasts for the UK to 1.7%, down from 2.0% previously.

IMF's Chief Economists, Maurice Obstfeld said that the downgrades in the forecasts for the UK were as a consequence of Brexit. "We forecast in the pre-referendum period, as did others, that there would be long-run negative effects on the British economy."

Recent economic data from the UK showed that GDP rose 0.3% in the second quarter, following a 0.2% increase in the first quarter. The third quarter estimates according to research from NIESR showed a 0.4% expansion during the period. However, leading economic indicators point to a possible slowdown. This is likely to put UK's economic expansion around the same pace of 0.3% on average.

US growth forecasts trimmed

The IMF also lowered the forecasts for the United States noting that President Trump's tax cut proposals might not happen. The IMF predicts that although the US economy will expand, it expects a 2.2% increase in 2017 and 2.3% in 2018. This was a slight downward revision from the previous report in April which showed a 2.3% and 2.5% increase respectively.

Despite lowering forecasts for the United States, the IMF said that global economy was recovering at a faster pace and said that the picture was very different from what the world economy faced early last year.

For the Eurozone, the IMF said that rising global trade and economic recovery would continue to drive growth in the Eurozone. The institution expects growth in the Eurozone to rise 2.1% this year, up from its previous forecasts of 1.8%.

Despite the positive news, many are still doubtful on how long the economic recovery will continue. Most importantly of concern is the risk that growth could potentially fade over the coming years. This comes at a time when asset prices are already at their peak and while central banks around the world are slowly moving away from an accommodative monetary policy.

Although the US Federal Reserve was the first central bank among the G7 nations to begin tightening monetary policy, the Bank of Canada soon caught up with two rate hikes this year. The European Central Bank is expected to announce a second leg of tapering its bond purchases later this month while the Bank of England is most likely to follow suit next.

However, with interest rates still historically low and many central bankers still cautioning that monetary policy will react to the economic developments, this has pushed investors into riskier assets in search of yield.

While there are still clouds of doubt and pessimism looming, for the moment, the global economic recovery is expected to continue for a while. However, the big question is how the markets will react once central banks move into offloading the trillions worth of assets that were amassed during the QE periods.