The World Bank's long-form report, Downward Long-Term Growth Prospects: Trends, Expectations, and Policies (the World Bank Report), provides the first comprehensive assessment of the world's long-term potential output growth rate in the wake of the pandemic and the Ukraine crisis, and makes pessimistic projections for the global economy. Almost all of the trends that drive progress and prosperity are fading, the report says. The current 10-year average annual economic growth rate will fall to a low level of 2.2%. World Bank Chief Economist Indermit Gill said: "The world economy faces a lost decade. "In the face of the difficulties and hidden worries of long-term development, what is the way out for the world economy? Perhaps, as Gill said: "One country cannot drive the world economy, and many countries must join forces." ”

Downside risks to the economy increase

The World Bank report notes that the global economy's "speed limit," the highest long-term growth rate without triggering inflation, could fall to its lowest level in 2030 years by 30. Without measures to boost economic growth, the average global potential GDP growth rate from 2022 to 2030 is expected to fall by about one-third from the 3.5% per year average in the first decade of this century to an average of 1.3% per year. The decline in developing economies was equally substantial, with an annual average of 2 per cent to 2 per cent from 2000 to 2010. The persistent and broad-based decline in long-term growth prospects has undermined the ability of emerging market and developing economies to eradicate poverty, address climate change, and achieve other key development goals.

Similar "pessimistic signals" have appeared in the forecasts of other mainstream international research institutions. The OECD's latest 2023 Medium-Term Economic Outlook forecasts that global economic growth will rise to 2023.11% in 2 from a modest forecast of 2.2% in November and 6.2024% in 2 as positive factors such as rising business and consumer confidence, falling food and energy prices, and China's economic reopening gradually emerge. Nevertheless, the global growth outlook remains fragile and subject to high downside risks over the next two years. The high level of uncertainty caused by the Russia-Ukraine conflict, the heightened trade tensions, and the high headline inflation rate continue to cast a shadow over the world economy.

The International Monetary Fund has also warned of new uncertainties in recent days. According to the International Monetary Fund, the global economy is expected to grow by almost 3% this year, down slightly compared to 2022. IMF Managing Director Georgieva said: "Risks to financial stability have increased. ”

According to the World Economic Forum's Global Risks Report 2023, conflict and geo-economic tensions have triggered a series of deeply interconnected global risks, including energy and food shortages and sharp increases in the cost of living and debt servicing that are likely to continue to plague the world over the next two years. At the same time, these crises undermine international efforts to address long-term risks, particularly those related to climate change, biodiversity, and investment in human capital.

The Human Development Report 2021/2022, the flagship report on human development released by the United Nations, also mentions that the Human Development Index is an indicator used by the United Nations Development Programme to measure a country's health, education and living standards. For the first time since UNDP launched its introduction 32 years ago, the Human Development Index declined globally for two consecutive years. Human development has fallen back to 2016 levels, reversing much of the progress needed to achieve the Sustainable Development Goals. These goals make up the 2030 Agenda and are the UN's blueprint for a fairer future for people and planet.

Polarization is growing

What is making the world economy struggling with the economy? The WHO report judged that the growth rate of investment and total factor productivity declined, the global labor force generally showed an aging trend, and the economic expansion rate was slower. The growth of international trade is much weaker now than it was at the beginning of this century. Under the impact of multiple adverse factors and limited policy space, the global economy has experienced a severe slowdown in growth.

The US "Fortune" website reported that the reduction of young skilled workers is dragging down the growth rate of the global labor force. This challenge will be exacerbated by the decline in global birth rates. World Bank President Malpass warned in a World Bank report that aging populations in rich and developing countries have led to "stagnant growth" in the global workforce, while the loss of children's education due to the pandemic has further affected human resources. At the same time, international tensions caused by the Russia-Ukraine conflict have to some extent hindered the flow of goods and people around the world, which is another factor affecting the limits of global growth.

"At the scientific and technological level, the world is facing the paradox of technological revolution: the information technology revolution has not brought about a significant increase in global total factor productivity, nor has it solved the problem of global development imbalance." Zhang Monan, deputy director and researcher of the US-Europe Research Department of the China Center for International Economic Exchanges, analyzed in an interview with this reporter that technological innovation may play an alternative role in traditional industries, and the marginal benefits brought by technological iteration to global economic growth are diminished, which is the development law of the technological revolution itself. In other words, technological advances benefit some labor groups, industries, and countries, but they also replace some of the workforce, potentially exacerbating global development imbalances. In the current scientific and technological revolution, developed countries have more technology and develop faster, and backward countries are difficult to participate in global cooperation in the field of high technology, falling into the quagmire of lagging development. The "scientific and technological divide" has become a major challenge for global development.

"Behind the current global economic development dilemma, the underlying logic of economic globalization has changed." Zhang Monan believes that since World War II, countries around the world have gradually formed an international trade order based on equal exchanges between countries. For more than 1990 years since 20, global economic integration has driven the world to prosperity, but it is now struggling. Since the 2008 financial crisis, the US foreign economic exchange strategy has tended to be conservative. Especially during the Trump administration, the United States provoked great power competition, changed the free and open international trade order based on the Washington Consensus, and tried to reshape globalization through "decoupling" and "broken chains". With the changes in the international situation such as the new crown epidemic, the Russia-Ukraine conflict and the Sino-US game, the United States continues to build a "small courtyard high wall" in the economic field by forming an exclusive alliance of "democratic values", bringing the "law of the jungle" into the field of international trade, undermining the international trade order, aggravating the rupture of the global industrial chain and supply chain, and seriously impacting globalization.

"Global development is facing severe challenges, and the deep-seated reason is the increasing trend of polarization in the world." Chen Fengying, a researcher at the China Institute of Contemporary International Relations, analyzed in an interview with this reporter that after the Russian-Ukrainian conflict, Finland and Sweden applied to join the US-led NATO, and the once neutral countries in the West moved closer to the United States, and the confrontation trend of the world camp was significantly strengthened. In this context, the issue of economic development is becoming increasingly politicized, protectionism and populism are prevalent worldwide, the world's major economies are making very slow progress in macroeconomic coordination, and the global macroeconomic policy environment continues to deteriorate. Some countries bind economic and political issues, use economic sanctions as a tool or even weapon to suppress and restrict the development of other countries, and the original global supply chain and industrial chain have been artificially cut off. The resulting economic difficulties such as the energy crisis, food crisis, and inflation have widened the gap between the rich and the poor in developed countries and intensified social contradictions. It also makes it more difficult for the poorer countries of the South to benefit from global resource allocation, widening the global gap between the rich and the poor.

Solidarity and cooperation are the only way forward

Addressing current challenges requires policy responses at the national and global levels, and these policy actions require enhanced cross-border cooperation and financial support from the international community, according to the World Bank report. Studies show that if countries adopt sustainable, growth-oriented policies, potential GDP growth can increase by 0.7 percentage points to 2.9%. "The decline in potential global growth is not irreversible and can raise the 'speed limit' of the global economy by incentivizing jobs, boosting productivity and accelerating investment," Indermit Gill said. ”

"To get out of the long-term global economic downturn, we need all countries around the world to work together." Xu Xiujun, director of the Institute of World Economics and Politics of the Chinese Academy of Social Sciences and the comprehensive research department of the national global strategy think tank, pointed out in an interview with this reporter that first of all, policymakers in various countries should take promoting economic recovery as the core content of national economic policies and create better conditions for their own economic recovery. Second, the international community must strengthen international macro policy coordination, avoid negative spillover effects of macroeconomic policies of certain countries, and achieve synergy between countries as much as possible, so as to achieve the overall effect of "1+1>2" and create a good international economic environment for promoting global economic recovery.

Chen Fengying believes that at present, countries around the world urgently need to find a cooperative dialogue mechanism, which must play the important role of international organizations. As the only superpower in the world, the United States increasingly regards international institutions as tools to maintain its hegemony, and adopts an attitude of "using what is good and discarding when it is disadvantageous" towards international cooperation institutions. Due to the increasingly fierce game of major powers, the willingness of major countries to cooperate weakened, the cost of reaching consensus among countries has increased, the efficiency of international organizations has decreased, and the space for playing a role has become more limited. However, balanced global development is inseparable from the role of international organizations, which still play an irreplaceable role in coordinating and communicating on many development issues such as food issues, energy issues, refugee issues, and environmental issues.

"Solidarity and cooperation are the only way out of the crisis. The problem of global economic growth is difficult to rely on one country to solve, and each country cannot be left alone, and must be jointly addressed by all countries in the world. Adhering to the correct direction of globalization is the real channel for solving global development problems. Zhang Monan said.

Against the backdrop of a slowing global economy, Asia emerged as a bright spot for global economic growth. The "2023 Annual Report on Asian Economic Outlook and Integration Process" released by the Boao Forum for Asia recently estimated that the weighted real GDP growth rate of Asian economies in 2023 will be 4.5%, an increase from 2022.4% in 2, and the overall pace of Asian economic recovery will continue to advance in 2023. The process of regional production, trade, investment integration and financial integration of Asian economies will accelerate.

"In the context of the rise of unilateralism and protectionism, the world's trade dependence on Asia has remained stable on the whole, and the trade dependence between Asian economies has maintained a high level. As the largest economy in Asia, China is also an important engine of global economic growth. With China's active participation and promotion, intra-Asian economic and trade relations have become closer. China is accelerating the construction of a new development pattern with domestic circulation as the main body and domestic and international dual circulation promoting each other, focusing on tapping the endogenous driving force of economic growth on the one hand, and promoting a higher level of opening up to the outside world on the other hand, deepening economic cooperation with neighboring countries, strengthening the connection between its own economy and the global economy, and providing a stronger impetus for global economic recovery. Xu Xiujun said.