The danger of one “lost decade” For global economy see through The World Bankas it notes the continued slowdown in growth potential and calls on governments and central banks take care and cooperate.

As he points out, the potential growth of the global economy by the year of the current decade is slowing to the lowest level in the last 30 years due to the pandemic and the war in Ukraine. While the millennium began with higher growth rates, the “speed limit” of the world economy, that is, the highest rate of growth that is estimated to be possible without starting inflationit is expected that by 2030 it will slow down to 2.2% per year.

In a statement accompanying the report, Intermeet Gill, World Bank Lead Economist and Vice President for Economic Policy for Development, noted that “the world economy could be a lost decade.” He stressed that “the continued decline in growth potential has serious implications for the world’s ability to address the ever-increasing challenges of our time, persistent poverty, income inequality and climate change.”

He urges the authorities to focus on curbing inflation and reducing debt.

However, the World Bank sees the most optimistic possibility that growth potential will reach 2.9% per annum if the authorities put in place the right plans to increase productivity, ensure labor adequacy and stimulate investment. However, the economists who wrote the report emphasize that in the event of a financial crisis or recession, things could turn out even worse and there could be a further drop in growth potential. Thus, they suggest that politicians pay more attention to certain issues. They repeat, for example, the constant refrain since the beginning of the pandemic that governments and central banks must work together to ensure that their policies do not conflict with each other, especially on inflation. He urges the authorities to focus on curbing inflation, ensuring stability in the financial sector and reducing debt in order to regain investor confidence.

At the same time, they emphasize that governments should allocate more money to projects for this. fighting climate change and, in particular, in the fields of transport, energy, agriculture, water supply and agriculture. As they point out, such efforts could boost annual growth by 0.3 percentage points. They also pay special attention to the further liberalization of international trade and the conclusion of new trade agreements. World Bank analysts specifically urge those countries that have fairly high freight rates and high logistics costs to halve them. They note that transport delays are extremely costly: according to an independent study cited by the World Bank, each day of delay is equivalent to a 0.8% tariff. In addition, they emphasize that the cost of trade can be reduced in a climate-friendly way, for example by removing tariffs that favor trade in products from high-carbon industries.