The World Bank’s recent prediction is not a rosy one. According to a report from the organization, the global economy is on track for its slowest growth rate in thirty years. The period between now and the end of 2030 has been dubbed the “lost decade” due to the fading of nearly all the economic forces that powered progress and prosperity over the past three decades.
The report warns that the average global potential GDP growth rate between 2022 and 2030 is expected to decline by roughly a third from the rate that prevailed in the first decade of this century. This decline is driven by various factors such as aging populations, slowing productivity growth, and declining investment rates.
The World Bank has also warned that a global financial crisis or recession could steep these declines, further hindering the world’s ability to tackle major challenges such as poverty, diverging incomes, and climate change.
The organization argues that low-income countries will be hit the hardest, as they are typically more vulnerable to economic shocks and have limited resources to manage them. The report calls for urgent action to boost productivity and investment in these countries to prevent long-term economic damage.
The World Bank’s findings highlight the urgent need for governments and international organizations to take measures to address the issues facing the global economy. These measures may include increased investment in infrastructure, education, and research and development to spur economic growth and innovation.
The report also underscores the importance of addressing the growing income inequality gap, which has widened in recent years, to ensure that economic growth benefits are shared more equitably.
The World Bank’s report paints a gloomy picture of the global economy in the coming decade. The decline in potential growth has profound implications for poverty, diverging incomes, and climate change. Urgent action is needed to address these issues and prevent long-term economic damage, particularly in low-income countries.
The World Bank’s report highlights that the COVID-19 pandemic has accelerated the decline of global economic growth, which was already underway due to aging populations and declining productivity. The pandemic has caused widespread disruption to supply chains, decreased investment, and increased debt levels, all of which have contributed to slowing economic growth. The report also notes that the pandemic has exposed and exacerbated existing inequalities, particularly for vulnerable populations such as women and low-skilled workers.
In response to the report, the World Bank calls for urgent action to address these issues and reverse the trend of declining economic growth. The report suggests that policies to increase productivity, invest in education and training, and promote innovation are crucial for sustainable economic development. The report also emphasizes the importance of addressing gender-based disparities as a critical driver of economic growth.
The World Bank’s report comes at a critical time for the global economy, as countries worldwide grapple with the ongoing effects of the COVID-19 pandemic. While the report paints a bleak picture of the future, it also provides a roadmap for how policymakers can work to reverse the trend of declining economic growth and promote sustainable, inclusive development.