Falling Long-Term Growth Prospects: Trends, Expectations, and Policies

Falling Long-Term Growth Prospects: Trends, Expectations, and Policies

A new World Bank working paper "Falling Long-Term Growth Prospects: Trends, Expectations, and Policies" has been published.

The document provides a comprehensive assessment of the long-term economic consequences of the COVID-19 pandemic and the armed conflict in Ukraine. As the authors note, all the economic factors that have ensured progress and prosperity over the past three decades are losing strength. According to the organization, the average global GDP growth in the period 2022-2030. will decrease by about a third and amount to 2.2% per year.

To support potential economic growth in the long term, the World Bank recommends taking the following measures:

  • Pursue a coherent monetary and fiscal policy to ensure the sustainability of the financial system. Policy makers should prioritize curbing inflation, reducing government debt, and making government institutions more attractive to investors and more efficient.
  • Increase investment in areas such as transport and energy, agriculture and manufacturing.
  • Reduce trade costs – optimization of supply chains, improvement of regulatory and legal regulation.
  • Develop the service sector, which can become a new driver of economic growth. The share of exports of digital services in the total volume in 2021 exceeded 50%.
  • Promote the economic activity of the population.
  • Expand international cooperation.

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