Global GDP growth in the current decade will be the lowest in 60 years

The 2020s are on track to be the decade with the weakest global growth since the 1960s, which is widening gaps in income and living standards between already rich countries, the so-called “developing” countries, and low-income countries, the World Bank (WB) warned.

In fact, by the end of this year, the per capita gross domestic product (GDP) of developing economies is expected to average $6,500, just 12 percent of that of a high-income economy.

The gap for poor countries – those with low income – “is more striking,” said Indermit Gill, chief economist of the WB. GDP per capita in these countries is projected to be below $700, about one percent of high-income countries, the researcher compared.

That is to say, in the middle of a decade that began with the recession imposed by the coronavirus pandemic, for every dollar that a person in a poor country earns on average, in a high-income country they earn 100.

Although the political uncertainty of the last 12 months is counted as “historically high”, global growth is expected to remain relatively stable, around 2.7 percent, until 2027, the organization published in its Global Economic Outlook.

This global picture shows an insufficient growth rate to reduce extreme poverty and create jobs where they are most needed, which would lead to the lowest economic expansion since the 1960s, Gill noted.

“This depressing statistic hides an even more disconcerting detail. While almost all advanced economies will have a higher per capita income than before the pandemic, one in four developing countries – and more than a third of all low-income economies – will be poorer than five years ago,” the economist emphasized.

Work challenge

Until 2025, more than half of the 10 percent increase in global GDP per capita since 2019, the eve of the coronavirus pandemic crisis, is due to the performance of the richest economies, according to the World Bank.

“These trends could intensify the job creation challenge facing developing economies, where 1.2 billion young people will reach working age over the next decade,” the agency noted.