Terrifying global economy report from the World Bank
The Bank has published its report entitled “Reducing Long-Term Growth Prospects: Trends, Expectations, and Policies.”
In the report, which includes the first comprehensive assessment of long-term potential growth rates after the Covid-19 epidemic and the Russian-initiated war in Ukraine, it was noted that the maximum long-term rate at which it can grow the world economy without causing inflation to fall to the lowest level in 30 years by 2030.
“SPEED LIMIT”
In the report, it was stated that these fees can be considered as the “speed limit” of the global economy.
Noting that almost all of the economic forces that have bolstered progress and prosperity have weakened over the past 30 years, the report indicated that the average potential growth of the global economy is expected to slow to 2.2 percent per year between 2022 and 2030, which is about a third of the rate in the first 10 years of this century.
IT WILL BE DOWNLOADED AT 4 PERCENT
The report noted that the downturn in question will be equally harsh for emerging economies, with an average potential growth rate of 6 percent a year between 2000 and 2010 falling to 4 percent a year for the rest of these 10 years.
The bank’s report warned that these declines would be much steeper in the event of a global financial crisis or recession.
RECESSIONS AND SYSTEMIC BANKING CRISES ARE EFFECTIVE ON GROWTH
Pointing out that potential growth could increase by up to 0.7 points if countries adopt growth-oriented and sustainable policies, it was noted that this would turn an expected slowdown into an acceleration of potential growth in the global economy.
A series of short-term economic shocks, such as recessions and systemic banking crises, have dampened potential growth in the medium term, according to the report.
The report also included certain policy actions at the national level that could make a significant difference in supporting long-term growth prospects.
“NEED ACCESS”
In the report, it was noted that investments in line with basic climate goals need to be accelerated in areas such as transport and energy, climate-friendly agriculture and production, soils and water systems.
The report, which stated that trade costs should also be reduced, stated that labor participation should be increased and that the service sector could be the “new engine” of economic growth.
“THE SPEED LIMIT OF THE GLOBAL ECONOMY CAN BE INCREASED THROUGH POLICIES”
Indermit Gill, Chief Economist at the World Bank and Senior Vice President for Development Economics, commented on the report: “The global economy is on track for 10 lost years.” she made her assessment.
Noting that the continued decline in potential growth has serious implications for the world’s ability to cope with the growing challenges of the times, such as poverty, the income gap and climate change, Gill noted that this decline can only be reversed.
“The speed limit of the global economy can be increased through policies that encourage work, increase productivity and accelerate investment,” Gill said. he used the phrase. (AA)