The World Bank said that countries need to take measures to prevent the expected global downturn in economic growth.
Last Monday, March 27, the World Bank published a report stating that in the period up to the end of this decade, the average potential growth of global GDP is expected to slow down to 2.2%. These growth rates are about a third lower than the same indicator, which was recorded in the period from 2010 to 2020.
The World Bank’s chief economist and senior vice President for Development Economics, Indermita Gilla, said that the decline in potential growth threatens the world’s ability to solve global problems, including poverty, income inequality, and climate change. It is possible to increase the speed of the global economy by introducing policies aimed at stimulating labor, increasing productivity, and boosting investment activity.
The World Bank invites countries to focus on implementing measures to curb inflation, ensure the sustainability of the financial industry and reduce debt. The organization also calls for increased investments in transport, energy, agriculture, manufacturing, land, and water systems.
The report also says that digital technologies can become a catalyst for economic growth.
Ayhan Kose, the lead author of the report and director of the World Bank’s Outlook Group, said it was necessary to formulate policies for future generations that could ensure stable and inclusive growth. He also noted that the time has come to take a bold collective political step to revive economic growth.
Franziska Onsorge, the lead author of the report and manager of the World Bank’s Outlook group, says that recessions traditionally slow down potential growth. She also noted that banking crises provoke negative consequences on a larger scale, but over time this factor loses its influence.
Earlier in February 2023, the United States nominated former Mastercard CEO Ajay Bangu to head the World Bank. The current head of the organization, David Malpass, announced that he would resign by June 30 after more than four years in office.
As we have reported earlier, World Bank Launches Carbon Asset Tracking System.