Global growth has been slower in the past decade compared to previous ones and the post-pandemic recovery is losing momentum, a World Economic Forum report said.
The Future of Growth Report 2024, released at the WEF summit in Davos, found that high-income economies’ GDP grew by 1.4% annually between 2018 and 2023, while upper middle-income economies, lower middle-income economies, and low-income economies grew by 2.2%, 3.1%, and 3.1%, respectively.
Total global GDP is higher than its pre-pandemic level but growth rates in 2023 remain below 4% across all income groups, the report found after an analysis of data for 107 countries.
“Global growth has lost momentum. On average, GDP growth has declined from more than 2% in advanced economies and nearly 6% in emerging and developing economies in the early 2000s to less than 1.5% and less than 2% in the post-covid period,” Saadia Zahidi, managing director, World Economic Forum, said.
“This sustained slowdown in growth has been compounded by a succession of crises. It is now more than 15 years since the beginning of the global financial crisis, yet it continues to cast a shadow, not least in the policy choices of many advanced economies. The COVID-19 pandemic and the shock of lockdowns left behind an aftermath of a surge in public debt levels and reversal of global development progress,” Zahidi added.
Quality of growth
Part of the World Economic Forum’s Future of Growth Initiative, the report evaluates the quality of growth for each of the 107 countries on four key parameters: innovativeness, inclusiveness, sustainability, and resilience.
The multidimensional approach focuses on evaluating the quality of growth and the balance between various priorities rather than aggregating them into a single index.
With a GDP of $7,502 at purchasing power parity (PPP) per capita, India has recorded a GDP per capita growth of 3.1% abd average GDP growth of 5.5% between 2018 and 2023.
On the four parameters charted in the WEF’s Future of Growth Initiative, India recorded 40.23 score on innovativeness, 41.69 on inclusiveness, 56.04 on sustainability, and 51.21 on resilience—all on the scale of 0-100.
On a global scale, the average on innovativeness is 45.2, the lowest among the four pillars.
The sustainability dimension’s global average is 46.8 out of 100, while the inclusiveness and resilience dimensions’ global average scores are 55.9 out of 100 and 52.8 out of 100, respectively.
No economy has attained a score higher than 80 on any of the framework’s four dimensions.
The report finds that high income economies, with an average GDP of $52,475 per capita, have high scores on inclusiveness, innovativeness, and resilience, but have room to improve on sustainability.
With an average GDP of $17,900 per capita, upper middle-income economies’ growth pathway generally features a higher emphasis on inclusiveness and resilience, with room to improve on sustainability and innovativeness.
However, lower middle income economies’ growth pathway has generally been focused on resilience, with higher scores on sustainability than richer economies but room to improve on inclusiveness and innovativeness. These economies have an average GDP of $7,633 per capita.
Low-income economies, with an average GDP of $1,533 per capita, usually have a much lighter environmental footprint per capita—resulting in a high sustainability performance—but with room to improve on resilience, inclusiveness, and innovativeness.
Commenting on the findings of the report, Zahidi said the future of growth must shift to a better balance between quantity and quality.
“A simple “return” to GDP growth is not enough. Instead, each country must undertake a unique and complex journey towards achieving innovative, inclusive, sustainable, and resilient growth, while contributing to global resilience. This report aims to serve as a call to action for leaders to critically reassess and recalibrate their growth models and policies for a new economic era,” she added.
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