World Bank warns of ‘lost decade’ in global growth
The World Bank on Monday warned that the global economy’s “speed limit” — the maximum long-term rate at which it can grow without sparking inflation — is set to slump to a three-decade low by 2030 and advocated an ambitious policy push by national economies to boost productivity and the labour supply, ramp up investment and trade, and harness the potential of the services sector. The report, “Falling Long-Term Growth Prospects: Trends, Expectations, and Policies,” launched on Monday offers the first comprehensive assessment of long-term potential output growth rates in the aftermath of the Covid-19 pandemic and the Russian invasion of Ukraine. These rates can be thought of as the global economy’s “speed limit.” The bank noted that nearly all the economic forces that powered progress and prosperity over the last three decades were fading. As a result, between 2022 and 2030 average global potential GDP growth is estimated to decline by roughly a third from the rate that prevailed in the first decade of this century — to 2.2pc a year.