The International Monetary Fund said on Wednesday that global economic growth will reach just 2.8% by 2030, a full percentage point below the historical average, unless major reforms are made to boost productivity and take advantage of technology tools such as artificial intelligence.
The International Monetary Fund issued a chapter of the upcoming World Economic Outlook report that showed a further decline in the global growth rate, which has experienced a steady slowdown since the global financial crisis in 2008 and 2009.
“Without ambitious steps to boost productivity, global growth is expected to fall below its historical average,” the IMF said, warning that weak growth expectations could discourage investment and may exacerbate the slowdown.
He continued, saying that the continuation of the low growth scenario with high interest rates may also limit the ability of governments to confront the economic slowdown and invest in social welfare or environmental initiatives.
“All of this is exacerbated by the strength of adverse conditions resulting from geographic economic dispersion and harmful unilateral trade and industrial policies,” he added in a blog attached to the third chapter of the World Economic Outlook report, which will be issued in full next Tuesday.
The Fund said a year ago that it expects medium-term growth to reach about three percent. The new forecasts reflect downward revisions to growth for all income groups and regions in the medium term, especially in emerging market economies.
The Fund urged countries to take urgent measures to confront expectations of weak growth, warning that it leads to worsening prospects for living standards and reducing poverty globally.
He said a range of policies, including better allocation of capital and labor and addressing labor shortages in major economies with aging populations, may offer hope.
He explained that harnessing the potential of artificial intelligence to enhance labor productivity may increase global growth by up to 0.8 percentage points based on the extent of its application and impact on the workforce.
He stated that the long-term impact of artificial intelligence has not yet been fully evaluated, as it may help increase productivity, but it may also replace humans in certain jobs and completely change the nature of other jobs.
He added that given these concerns, countries must strengthen their regulatory frameworks, ensure the protection of intellectual property, and work to ensure that the benefits of artificial intelligence are shared fairly and broadly.
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