Without a rapid change of direction the global economy is facing a “decade of wasted opportunity”, according to a new report published today by the World Bank.
The Global Economic Prospects report reveals grim statistics showing that by the end of this year the world could be heading towards its “slowest half-decade of GDP growth in 30 years” – it also lays out the transformations that can “turn the tide”.
“Without a major course correction, the 2020s will go down as a decade of wasted opportunity,” said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President. “Near-term growth will remain weak, leaving many developing countries—especially the poorest—stuck in a trap: with paralyzing levels of debt and tenuous access to food for nearly one out of every three people. That would obstruct progress on many global priorities. Opportunities still exist to turn the tide. This report offers a clear way forward: it spells out the transformation that can be achieved if governments act now to accelerate investment and strengthen fiscal policy frameworks.”
The report provides the ‘first global analysis’ of what is needed to trigger a ‘sustained investment boom’, with a minimum 4% per capita increase in investment over the next six years said to be key to unlocking an ‘economic windfall’ and a decline in poverty rates in developing countries; with $2.4 trillion annually given as the figure for ensuring developing countries can achieve ‘key development goals by 2030’.
“Investment booms have the potential to transform developing economies and help them speed up the energy transition and achieve a wide variety of development objectives,” adds Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of the Prospects Group. “To spark such booms, developing economies need to implement comprehensive policy packages to improve fiscal and monetary frameworks, expand cross-border trade and financial flows, improve the investment climate, and strengthen the quality of institutions. That is hard work, but many developing economies have been able to do it before. Doing it again will help mitigate the projected slowdown in potential growth in the rest of this decade.”
The full report can be downloaded here.
