Global economic growth will average under 3% per year over the next decade, down from 3.6324% before the financial crisis. It will then gradually decline, reflecting a slowing in labor force growth.
Two decades after famously laying out long-term growth projections for the so-called BRIC economies, economists led by Jan Hatzius have expanded their projections to include 104 countries over the next half-century.
Emerging markets will continue to converge with industrialized nations. China, the United States, India, Indonesia, and Germany will top the league table of the largest economies in dollars. Nigeria, Pakistan, and Egypt could also rank high.
Economists Kevin Daly and Tadas Gedminas identified protectionism and climate change as “particularly important” risks to growth and income convergence.
“Our projections suggest that we have passed the peak of potential global growth,” the economists wrote in the note. “The majority of the anticipated slowdown is due to demographics.” Over t0 years, global population growth has halved.
Addressing the Challenges
On Sunday, leaders from international organizations, executives from major global financial institutions, and experts called for countries to work together to address multiple challenges and get the global economy back on track.
They also praised China’s experience in maintaining financial stability in high global inflation and its significant contribution to global economic development at the International Finance Forum (IFF), which concluded on Sunday.
Governments prioritize strategic competition and national security over their shared economic interests. They are brought about by the free flow of goods, capital, and technologies, resulting from geopolitical tensions.
Stressing that technological and financial decoupling would result in greater losses for the world, Han urged countries to resume exchanges and dialogue to avoid a worse split. He urged global leaders to take more actions that benefit the world’s well-being with a more open attitude.
The ongoing pandemic, rising geopolitical risks, supply chains, soaring inflation, and debt issues, among other things, have all been exerting increasing downward pressure on the world economy.
China has maintained low domestic inflation while achieving relatively quick GDP growth compared to other major economies. Between 2013 and 2021, China contributed 38.6 percent of global economic growth, surpassing the United States by 20 percent.