Aging populations, low investment and tightening monetary policy potentially limit further economic expansion, the bank’s Global Economic Prospects said.

Growth in advanced economies is expected to moderate slightly to 2.2% this year while developing countries could see a growth of up to 4.5%.

“An analysis of the drivers of the slowdown in potential growth underscores the point that we are not helpless in the face of it,” said Shantayanan Devarajan, World Bank senior director for Development Economics. 

“Reforms that promote quality education and health, as well as improve infrastructure services could substantially bolster potential growth, especially among emerging market and developing economies. 

“Yet, some of these reforms will be resisted by politically powerful groups, which is why making this information about their development benefits transparent and publicly available is so important.”

Growth in 2017 was much stronger than expected and saw recovery in investment, manufacturing, and trade, while commodity-exporting developing economies have benefited from a firming in commodity prices.

Economic output grew 3% last year as more than half of the world’s economies accelerated and is expected to maintain that rough growth level through to 2020.

World Bank Group president Jim Yong Kim [picture] said: “The broad-based recovery in global growth is encouraging, but this is no time for complacency.

“This is a great opportunity to invest in human and physical capital. If policy makers around the world focus on these key investments, they can increase their countries’ productivity, boost workforce participation, and move closer to the goals of ending extreme poverty and boosting shared prosperity.”

This year is on track to be the first year that the global economy will be operating at or near full capacity since the financial crisis, the report said.