According to a new World Bank report, an ambitious policy push is needed to raise productivity and labor supply, increase investment and trade, and tap the potential of the services sector.

The report documents a worrying trend: nearly all of the economic forces that drove progress and prosperity over the past three decades are dissipating.

Consequently, it is expected that between 2023 and 2030 the average potential growth of world Gross Domestic Product (GDP) will decrease by approximately one third compared to the rate observed in the first decade of this century and will be around 2.2% per year.

In the case of developing economies, the decline will also be pronounced: from 6% per year between 2000 and 2010 to 4% per year for the rest of this decade.

These declines would be much sharper in the event of a global financial crisis or recession.

The analysis shows that potential GDP growth can increase by up to 0.7 percentage points to an average annual rate of 2.9% if countries adopt sustainable, growth-oriented policies.

Thus, the expected slowdown would translate into an acceleration of potential global GDP growth.

The report highlights specific policy measures at the national level that can make a significant contribution to promoting long-term growth prospects:

Align monetary, fiscal, and financial frameworks:

• The Increase investment
• Reduce trade costs
• Capitalize on services
• Increase labor force participation

Translated by: A.M