IMF warning about domestic shocks in the G20 and persistent low growth
The International Monetary Fund has released insights from its upcoming World Economic Outlook report.
The IMF warns that domestic shocks in G20 emerging economies are increasingly hitting growth in developed economies.
These countries, like China, India and Mexico, are now deeply embedded in the global economy, the report says, and as a result, are generating larger ‘spillovers’ to the rest of the global economy. IMF simulations suggest that a decline in productivity in G20 emerging markets can lower global output three times more than in 2000.
Impact of spillovers on global GDP by G20 emerging markets.Image: IMF
The IMF has also warned that the world needs significant reforms to boost productivity and make use of new technologies in order to reignite growth. A chapter from the World Economic Outlook shows further declines in global growth rate – a rate which has been slowing since the 2008-09 global financial crisis.
Without action, growth could reach just 2.8% by 2030, the fund warned.
