World Bank sees lost decade in the making

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World Bank sees lost decade in the making

Nearly all of the global economic forces that have driven progress and prosperity over the past three decades are fading. ‘A worrying trend’, says the World Bank in a report published today. “There could be a lost decade in the making for the global economy.”

As a result, average global economic growth between now and 2030 is expected to decline by about a third compared to the pace of the first decade of this century. This equates to a decrease to more than two percent growth per year.

recession

For emerging economies, growth is slowing, from six percent a year between 2000 and 2010, to four percent a year for the rest of this decade. These declines would be much stronger in the event of a global financial crisis or recession.

The global economy is on the brink of a lost decade. So says the World Bank. (Unsplash)

According to the institute, the continued decline in growth has “serious consequences” for the ability to tackle growing problems such as persistent poverty, income disparities and climate change. But this decline is reversible, the World Bank adds. This requires policies that ‘encourage work, increase productivity and accelerate investment.’

Sustainable and inclusive growth

According to the institute, ‘we owe it to future generations to formulate policies that can deliver robust, sustainable and inclusive growth’. Under current policy, the World Bank estimates that the maximum long-term growth rate of the world economy, without fueling inflation, will fall to a three-decade low by 2030.


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