World Bank warns of 'lost decade' of global growth
Promoting sustainable investment and incentives for work can boost growth

The World Bank is warning of a "lost decade" for global economic growth unless drastic action is taken to boost labor, productivity and investment. A new World Bank report predicts that global economic growth will fall to a three-decade low averaging 2.2% per year by 2030, with massive implications for the fight against climate change and poverty.
The report stresses that concerted efforts to increase investment in sustainable sectors, reduce trade costs, leverage growth in the services sector and increase labor market participation could boost potential economic growth by up to 0.7 percentage points to 2.9%. However, he said it is important to incentivize work, increased productivity and accelerated investment to reverse the current trend.
The past few years have been marked by several crises, including the COVID-19 pandemic and Russia's invasion of Ukraine. These have ended nearly three decades of sustained economic growth and heightened concerns about declining productivity, which is essential for income growth and higher wages. Average GDP growth is considered a "speed limit" for the global economy because it indicates the maximum long-term rate at which it can grow without triggering excessive inflation.
Developing economies will also grow more slowly due to low investment, with an expected decline in average economic growth to 4% for the remainder of the 2020s, down from 5% in 2011-2021 and 6% from 2000 to 2010. The report warns that the economic forces that have contributed to the rise of some developing countries over the past three decades are now pulling back.
To spur investment and boost economic growth, governments should curb inflation, ensure financial sector stability and reduce debt. The World Bank recommends increasing investment in climate-smart sectors such as transportation, energy, climate-smart agriculture and manufacturing, and water and land systems to boost potential growth by up to 0.3 percentage points per year.
In addition, exporting digital services and increasing the employment rate of women and other groups can boost global potential growth by up to 0.2 percentage points per year by 2030. The goal of taming inflation, ensuring financial sector stability, and reducing debt should also be priorities for policymakers to attract more investment. Finally, promoting climate-smart investments in transportation and energy, climate-smart agriculture and manufacturing, and land and water systems will be able to boost potential growth by up to 0.3 percentage points per year by 2030.





