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Following the collapse of Silicon Valley Bank and a budding banking crisis, the United States and Europe have found difficulty in solidifying the troubling banking sector. WASHINGTONAverage potential global economic growth will slump to a three-decade low of 2.2% per year through 2025, ushering in a “lost decade” for the world’s Average potential global economic growth will slump to a three-decade low of 2.2% per year through 2025, ushering in a lost decade for the world's economy, unless WASHINGTON (Reuters) -Average potential global economic growth will slump to a three-decade low of 2.2% per year through 2025, ushering in a lost decade for the Having started the millennium on a faster trajectory, the global economy’s “speed limit” – or the highest long-term rate at which it can grow without triggering inflation – is

World Bank Warns of a Lost Decade: Urgent Policy Changes Needed

The World Bank has issued a stark warning: without vital policy changes, the global economy faces a “lost decade” characterized by sluggish growth. Average potential global economic growth will slump to a three-decade low of 2.2% per year through 2025, ushering in a lost decade for the world\'s economy, unless decisive action is taken.

WASHINGTON (Reuters) -Average potential global economic growth will slump to a three-decade low of 2.2% per year through 2025, ushering in a lost decade for the world This alarming forecast paints a grim picture, highlighting the urgent need for governments and international organizations to implement reforms that can stimulate sustainable and inclusive growth.

The warning comes at a particularly vulnerable time for the global economy. Following the collapse of Silicon Valley Bank and a budding banking crisis, the United States and Europe have found difficulty in solidifying the troubling banking sector. Instability in the financial sector further exacerbates the challenges and underscores the fragility of the current economic landscape.

Having started the millennium on a faster trajectory, the global economy’s “speed limit” – or the highest long-term rate at which it can grow without triggering inflation – is significantly lower now. Factors contributing to this slowdown include declining investment, aging populations, and persistent structural challenges. The World Bank emphasizes that addressing these issues through targeted policy interventions is crucial to avert the predicted "lost decade."

The report calls for a range of policy measures aimed at boosting productivity, promoting investment, and strengthening international cooperation. These include reforms to improve education and skills development, measures to encourage innovation and technological adoption, and efforts to create a more favorable business environment. Failure to implement these changes risks locking the global economy into a prolonged period of slow growth, with potentially severe consequences for living standards and poverty reduction.

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