World Bank Fears Lost Decade
The World Bank’s semiannual Global Economic Prospects report lowered its projections for global growth because of lower trade and investment caused by uncertainty over the pandemic, along with disruptions in education that will hamper gains in labor productivity. (Wall Street Journal)
Before the pandemic, the bank projected that potential global growth between 2020 and 2029 would slow to a yearly average of 2.1%, from 2.5% in the previous decade, as a result of aging populations and lower productivity growth. On Tuesday the bank lowered its projection to 1.9%. Potential output assumes the world economy is operating at full employment and capacity.