Slowing Growth: More Than a Rough Patch

Across the world, a structural growth slowdown is underway: at current trends, the global potential growth
rate—the maximum rate at which an economy can grow without igniting inflation—is expected to fall to a
three-decade low over the remainder of the 2020s. The slowdown could be even more pronounced if
financial crises erupt in major economies and spread to other countries, as these types of episodes often
lead to lasting damage to potential growth. A persistent and broad-based decline in long-term growth
prospects imperils the ability of emerging market and developing economies (EMDEs) to combat poverty,
tackle climate change, and meet other key development objectives. These challenges call for an ambitious
policy response at the national and global levels.