Falling Long-Term Growth Prospects

https://www.worldbank.org/en/research/publication/long-term-growth-prospects Across the world, a structural growth slowdown is underway: at current trends, global potential growth—the maximum growth the global economy can sustain over the longer term without igniting inflation—is expected to fall to a three-decade low over the remainder of the 2020s. Nearly all the forces that have powered growth and prosperity since the early 1990s have weakened. The growth rates of investment and total factor productivity are declining. The global labor force is aging, and expanding more slowly. International trade growth is much weaker now than it was in the early 2000s. In addition, a series of shocks has roiled the global economy over the past three years. A persistent and broad-based decline in long-term growth prospects imperils the ability of emerging market and developing economies to combat poverty, tackle climate change, and meet other key development objectives. These challenges call for an ambitious policy response at the national and global levels. The slowdown can be reversed by the end of the 2020s—if all countries replicate some of their best policy efforts of recent decades, including a major investment push grounded in robust macroeconomic frameworks. Bold policy actions at the national level will need to be supported by increased cross-border cooperation and substantial financing from the global community.