International Monetary Fund (IMF) experts have issued a report that forecasts low worldwide economic growth for several years ahead. Most of the reasons for this are not easily solved, if they can be solved at all. The forecast, therefore, is very likely to be true, which would radically change the belief that nations that are pockets of rapid gross domestic product (GDP) expansion can lift worldwide economic improvement substantially.
In the report, known as "Lower Potential Growth: A New Reality", the authors pointed out:
Potential output growth has declined since the global financial crisis
Decline reflects impact of aging; lower capital and productivity growth
Policy action required to boost productivity, foster capital growth, and offset the effects of aging
"Policy action" assumes a level of cooperation among leaders inside many countries, and that has not been the case — ever. Obviously, changing the direction of aging is impossible. Slowing or stopping many of the trends is impossible.
The IMF experts put most of the root causes of the problems in the recent deep recession. That, it has been assumed, should not have dampened strong expansion in huge economies, led by China. Whether or not the authors of the IMF report have considered it, pollution in China, coupled with slow demand for goods it manufactures, have undermined its GDP improvement.
Experts maintain Europe has never entirely recovered from the recession, and add the United States is the only major economy that has shown signs it is back on track. Ironically, just a few years ago, many analysts believed slow growth in the United States would be a primary drag on world GDP.
That has not proved true, but the U.S. cannot carry the balance of the world on its shoulders.
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