A new World Economic Forum report highlights a significant global economic slowdown, estimated to fall to the lowest rate in three decades by 2030, amid ongoing economic and geopolitical shocks. 

 

This downturn is exacerbating a range of interconnected global challenges, including the climate crisis and a weakening social contract, which are collectively reversing progress in global development.

 

The Future of Growth Report 2024 then offers a re-evaluation of global economic growth, and introduces a new framework that takes a holistic look at GDP alongside the quality of growth across 107 economies.

 

Reigniting growth

“Reigniting global growth will be essential to addressing key challenges, yet growth alone is not enough,” said Saadia Zahidi, Managing Director, World Economic Forum. “The report proposes a new way for assessing economic growth that balances efficiency with long-term sustainability, resilience and equity, as well as innovation for the future, aligning with both global and national priorities.”

 

Launching alongside this report is the Forum's Future of Growth initiative, a two-year endeavour aimed at charting a new narrative for economic growth and supporting policy-makers from around the world, together with economists and other experts, in identifying the best pathways in balance growth, innovation, inclusion, sustainability and resilience goals.

 

Global analysis

The report reveals that most countries continue to grow in ways that are neither sustainable nor inclusive and are limited in their ability to absorb or generate innovation and minimise their contribution and susceptibility to global shocks.

 

The inclusiveness pillar, which measures the extent to which an economy’s trajectory includes all stakeholders in the benefits and opportunities it creates, and the resilience dimension, which captures the extent to which an economy’s trajectory can withstand and bounce back from shocks, have the highest global average scores, 55.9 out of 100 and 52.8 out of 100, respectively.

 

Meanwhile, the global average of the sustainability dimension, which measures the extent to which an economy’s trajectory can keep its ecological footprint within finite environmental boundaries, is 46.8 out of 100. 

 

The innovativeness dimension – which captures the extent to which an economy’s trajectory can absorb and evolve in response to new technological, social, institutional and organisational developments to improve the longer-term quality of growth – attains the lowest global score, with a global average of 45.2 out of 100.

 

Country-level analysis

At an individual level, none of the 107 economies covered by the report have attained a score higher than 80 on any of the framework’s four dimensions. The report provides country-level data that allows policy-makers to assess the character and nature of a country’s economic growth and identify potential areas for improvement and synergies.

 

High income economies, with an average GDP of $52,475 per capita (at purchasing power parity) in 2023, saw average annual GDP per capita growth of 1.01% over the past five years, 2018-2023. Their growth pathway is generally characterised by high scores on inclusiveness (68.9), innovativeness (59.4) and resilience (61.9), but room to improve on sustainability (45.8).

 

Countries in this group include Australia, Canada, France, Germany, Italy, Japan, Saudi Arabia, South Korea, the UK and the US. Notable high scores include Switzerland (80.4), Singapore (76.4) and the US (74.1) on innovativeness; Finland (77.7) and Canada (75.8) on inclusiveness; Sweden (60.9), Germany (56.3) and the UK (54.0) on sustainability; and Australia (69.5) and Japan (66.3) on resilience.

 

Common challenges preventing a stronger balanced growth performance of this group include talent availability, access to equal workplace opportunities, slow development and adoption of green technologies, and insufficient reskilling and lifelong learning.

 

Upper middle-income economies

Upper middle-income economies, with an average GDP of $17,900 per capita in 2023, saw average annual GDP per capita growth of 1.32% over the past five years. Their growth pathway generally features a relatively high emphasis on inclusiveness (54.8) and resilience (50.0), with room to improve on sustainability (44.0) and innovativeness (39.3).

 

Countries in this group include Argentina, Brazil, Indonesia, Mexico, South Africa and Türkiye. Notable high scores include Malaysia (52.3) and South Africa (44.1) on innovativeness; Brazil (56.0) and Costa Rica (48.8) on sustainability; and Indonesia (57.9) on resilience.

 

Common challenges preventing a stronger balanced growth performance of this group include research capacity, wealth and income inequality, high non-renewable energy intensity and waste production, and financial stability.

 

Lower middle-income economies

Lower middle-income economies, with an average GDP of $7,633 per capita in 2023, saw average annual GDP per capita growth of 1.95% over the past five years. Their growth pathway has generally been focused on resilience (45.8), with higher scores on sustainability (50.0) than richer economies but room to improve on inclusiveness (44.8) and innovativeness (34.9).

 

Countries in this group include Bangladesh, Egypt, India, Nigeria, Pakistan, the Philippines and Viet Nam. Notable high scores include Jordan (45.1) on innovativeness; Viet Nam (56.2) on inclusiveness; Kenya (57.2) and India (56.0) on sustainability; and the Philippines (54.1) on resilience.

 

Common challenges preventing a stronger balanced growth performance of this group include technology absorption, lack of social safety nets, insufficient investment in renewable energy and insufficient healthcare system capacity.

 

Low-income economies, with an average GDP of $1,533 per capita in 2023, saw average annual GDP per capita growth of just 0.22% over the past five years. Their growth pathway is generally characterised by a much lighter environmental footprint per capita – resulting in a high sustainability performance (52.7) – but with room to improve on resilience (39.0), inclusiveness (29.9) and innovativeness (26.8).

 

Notably high scores are achieved by Rwanda, with a particularly strong emphasis on resilience (52.8). Common challenges preventing a stronger balanced growth performance of this group include ICT capital and connectivity, access to connectivity and healthy nutrition, insufficient environmental regulation and insufficient energy source diversification.--TradeArabia News Service