WB Warns Global Growth Is Skidding, Lost Decade Afoot

After three decades of mostly fast-paced growth, the global economy may finally be in for a big slowdown.

Photo Insert: Global GDP growth could shrink to 2.2% annually between now and 2030, a decline of a third from the 3.5% average rate from 2000 to 2010 and a source of potential economic stagnation for years to come.

A number of economic risks, including an aging global workforce and declining private sector investment, are converging to limit economic growth.

Left unattended, these threats could reverse decades of efforts to reduce poverty and fast-track development, while setting the stage for a “lost decade,” Tristan Bove reported for Fortune.

That’s the warning of a new report released by the World Bank that finds almost every factor that fueled global economic growth and poverty reduction since the 1990s could disappear by the end of the decade.

Global GDP growth could shrink to 2.2% annually between now and 2030, a decline of a third from the 3.5% average rate from 2000 to 2010 and a source of potential economic stagnation for years to come.

“A lost decade could be in the making for the global economy,” Indermit Gill, the World Bank’s chief economist, said in a statement, referring to extended periods of snail-paced growth that have afflicted countries including the US and Japan.

But the next lost decade could be much larger in scope, affecting the global economy and inhibiting countries’ ability to invest in addressing future threats.

“The ongoing decline in potential growth has serious implications for the world’s ability to tackle the expanding array of challenges unique to our times—stubborn poverty, diverging incomes, and climate change,” Gill said.

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