World Bank Warns of Lost Decade for Global Economy
Kanebridge News
    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,587,785 (-9.64%)       Melbourne $968,477 (-1.28%)       Brisbane $894,769 (-1.51%)       Adelaide $810,780 (-6.94%)       Perth $764,276 (-4.92%)       Hobart $750,134 (+1.16%)       Darwin $645,801 (-3.38%)       Canberra $1,017,220 (+3.56%)       National $1,010,264 (-5.75%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $725,381 (-1.27%)       Melbourne $488,555 (-0.24%)       Brisbane $499,581 (-5.39%)       Adelaide $411,364 (-4.41%)       Perth $414,273 (-2.57%)       Hobart $498,192 (-6.11%)       Darwin $351,130 (-4.84%)       Canberra $480,942 (-4.46%)       National $506,040 (-3.24%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 10,047 (+6,578)       Melbourne 14,543 (+5,785)       Brisbane 8,228 (+1,243)       Adelaide 2,741 (+600)       Perth 6,788 (+1,322)       Hobart 1,219 (+48)       Darwin 269 (+17)       Canberra 1,013 (+155)       National 44,848 (+15,748)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,226 (+4,905)       Melbourne 7,846 (+2,295)       Brisbane 1,759 (+304)       Adelaide 499 (+101)       Perth 1,899 (+331)       Hobart 186 (-9)       Darwin 388 (+26)       Canberra 854 (+60)       National 21,657 (+8,013)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $780 ($0)       Melbourne $590 ($0)       Brisbane $620 ($0)       Adelaide $600 ($0)       Perth $650 ($0)       Hobart $550 (-$10)       Darwin $680 ($0)       Canberra $690 ($0)       National $652 (-$1)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $725 (-$5)       Melbourne $580 ($0)       Brisbane $620 (-$10)       Adelaide $450 (-$20)       Perth $600 (+$15)       Hobart $470 (-$10)       Darwin $570 ($0)       Canberra $570 ($0)       National $584 (-$3)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,614 (+7)       Melbourne 5,631 (-24)       Brisbane 4,055 (-125)       Adelaide 1,248 (+4)       Perth 1,830 (+7)       Hobart 380 (+12)       Darwin 153 (-19)       Canberra 664 (-12)       National 19,575 (-150)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 7,725 (-368)       Melbourne 5,038 (-276)       Brisbane 2,044 (-65)       Adelaide 394 (+11)       Perth 594 (-34)       Hobart 139 (+1)       Darwin 285 (-5)       Canberra 590 (-16)       National 16,809 (-752)                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.55% (↑)      Melbourne 3.17% (↑)      Brisbane 3.60% (↑)      Adelaide 3.85% (↑)      Perth 4.42% (↑)        Hobart 3.81% (↓)     Darwin 5.48% (↑)        Canberra 3.53% (↓)     National 3.36% (↑)             UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.20% (↑)      Melbourne 6.17% (↑)      Brisbane 6.45% (↑)      Adelaide 5.69% (↑)      Perth 7.53% (↑)      Hobart 4.91% (↑)      Darwin 8.44% (↑)      Canberra 6.16% (↑)      National 6.01% (↑)             HOUSE RENTAL VACANCY RATES AND TREND       Sydney 0.7% (↑)      Melbourne 0.8% (↑)      Brisbane 0.4% (↑)      Adelaide 0.4% (↑)      Perth 1.2% (↑)      Hobart 0.6% (↑)      Darwin 1.1% (↑)      Canberra 0.7% (↑)      National 0.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 0.9% (↑)      Melbourne 1.4% (↑)      Brisbane 0.7% (↑)      Adelaide 0.3% (↑)      Perth 0.4% (↑)      Hobart 1.5% (↑)      Darwin 0.8% (↑)      Canberra 1.3% (↑)        National 0.9% (↓)            AVERAGE DAYS TO SELL HOUSES AND TREND         Sydney 36.6 (↓)       Melbourne 40.8 (↓)       Brisbane 36.8 (↓)       Adelaide 31.2 (↓)       Perth 41.1 (↓)       Hobart 41.6 (↓)       Darwin 49.2 (↓)       Canberra 39.9 (↓)       National 39.7 (↓)            AVERAGE DAYS TO SELL UNITS AND TREND         Sydney 36.2 (↓)       Melbourne 39.2 (↓)       Brisbane 33.8 (↓)       Adelaide 30.0 (↓)     Perth 43.3 (↑)      Hobart 43.8 (↑)        Darwin 33.7 (↓)       Canberra 45.3 (↓)       National 38.2 (↓)           
Share Button

World Bank Warns of Lost Decade for Global Economy

Lender sees demographics, war and pandemic aftereffects holding back growth

By HARRIET TORRY
Thu, Apr 6, 2023 9:56amGrey Clock 4 min

Over the past year, governments around the world have announced tax breaks, subsidies and new laws in a bid to accelerate investment, combat climate change and expand their workforces.

That might not be enough.

The World Bank is warning of a “lost decade” ahead for global growth, as the war in Ukraine, the Covid-19 pandemic and high inflation compound existing structural challenges.

The Washington, D.C.-based international lender says that “it will take a herculean collective policy effort to restore growth in the next decade to the average of the previous one.” Three main factors are behind the reversal in economic progress: an ageing workforce, weakening investment and slowing productivity.

“Across the world, a structural growth slowdown is under way: 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 World Bank said.

Potential growth was 3.5% in the decade from 2000 to 2010. It dropped to 2.6% a year on average from 2011 to 2021, and will shrink further to 2.2% a year from 2022 to 2030, the bank said. About half of the slowdown is attributable to demographic factors.

The latest alarm bells from the World Bank about the global economy come in the wake of the U.S.’s passing the Inflation Reduction Act, which includes hundreds of billions in incentives and funding for clean energy, as well as a law to ratchet up investments in semiconductors. In response, the European Union is relaxing its rules on government tax breaks and other benefits for clean-tech companies.

Meantime, major economies are trying to boost their workforce numbers, often in the face of steep resistance. In France, protesters responded violently to President Emmanuel Macron’s overhaul of the country’s pension system, while China’s shrinking population has prompted local governments there to offer cash rewards and longer maternity leaves to boost births.

These efforts so far might be too little, too late. Weakness in growth could be even more pronounced if financial crises erupt in major economies and trigger a global recession, the World Bank report cautions. The warning comes just weeks after the collapse of Silicon Valley Bank sparked turmoil in the U.S. and European banking sectors.

Questions surrounding global growth prospects will be in the air in Washington, D.C., alongside the blooming cherry blossoms at the spring meetings of the International Monetary Fund and World Bank from April 10 to 16.

Policy makers and central-bank officials will join economists from around the world to discuss topics including inflation, supply chains, global trade fragmentation, artificial intelligence and human capital.

Earlier this year, the World Bank sharply lowered its short-term growth forecast for the global economy, citing persistently high inflation that has elevated the risk for a worldwide recession. It expects global growth to slow to 1.7% in 2023. Other organisations, such as the International Monetary Fund and the Peterson Institute for International Economics, a Washington-based think tank, expect global GDP growth to expand a more robust 2.9% in 2023.

This isn’t the first time the World Bank has warned of a lost decade. In 2021, the lender said the Covid-19 pandemic raised the prospect owing to lower trade and investment caused by uncertainty over the pandemic. It issued similar warnings after the 2008 financial crisis. Global growth from 2009 to 2018 averaged 2.8% a year, compared with 3.5% in the prior decade.

The World Bank identifies a number of challenges conspiring to push down global growth: weak investment, slow productivity growth, restrictive trade measures such as tariffs and the continuing negative effects—such as learning losses from school closures—because of the pandemic.

It said pro-growth policies would help. Measures to boost labor-force participation among discouraged workers and women can help reverse the negative trend in labor force growth from an older population and lower birthrates, according to the World Bank.

Some view the World Bank’s projection for a lost decade as too pessimistic. Harvard University economist Karen Dynan said that ageing populations in nearly every part of the world will be a drag on global growth, but she was more optimistic on raising productivity—output per worker.

“I expect, outside the demographic effects, output per person to look a lot like it did before the pandemic,” she said.

“The World Bank is right to draw concern to the possibility of a lost decade in sub-Saharan Africa, in Central America, in South Asia—an awful lot of human beings are at risk or are facing very grim situations,” said Adam Posen, president of the Peterson Institute for International Economics.

“But from a global GDP outlook, or even a global population outlook, most of the major emerging markets along with most of the Group of 20 essentially are doing pretty well,” Mr. Posen said. He pointed to economic resilience in Europe and emerging markets in recent years, even as the Federal Reserve has sharply raised interest rates.



MOST POPULAR

Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Related Stories
Money
Amid Geopolitical Concerns, Major Philanthropy Continues to Forge Ahead…Creatively
By Geoff Nudelman 24/02/2024
Money
Iron ore prices boost profits as ASX earnings season gets underway
By Bronwyn Allen 23/02/2024
Money
Elton John Fans Pay US$8 Million for His Treasures at Auction
By ABBY SCHULTZ 23/02/2024
Amid Geopolitical Concerns, Major Philanthropy Continues to Forge Ahead…Creatively
By Geoff Nudelman
Sat, Feb 24, 2024 3 min

Even amid two international conflicts and an upcoming U.S. presidential election, some philanthropic leaders are optimistic about the direction of overall giving through 2024.

Penta spoke with heads of several non-profits and leading philanthropists to gauge whether charitable giving will continue its reported slump from 2023 or rebound alongside renewed interest in various political and economic issues.

“Contrary to what some might expect, philanthropy has had resilience in these times,” says Stacy Huston, executive director of Sixdegrees.org, a youth empowerment non-profit based in Virginia founded by actor Kevin Bacon in 2007.

Huston’s view echoes recent data from the biennial Bank of America Study of Philanthropy published last year, which found that while affluent giving is largely down, the value of the average philanthropic gift is up 19%, surpassing pre-pandemic levels.

The notion of what these gifts look like is changing, and is partially responsible for the growth. Philanthropy can be executed through more avenues than ever, whether through celebrity association, tech titans stewarding large endowments, or  athletes using their platforms to advocate for and create meaningful change.

“The industry and movement is creating new models, and you want to get it right,” says Scott Curran, CEO of Chicago-based Beyond Advisers. “No one should take their foot off the gas pedal.”

Curran spent a number of years with the Clinton Foundation in its infancy before leaving in 2016 to open his own consultancy, which focuses on philanthropy strategy at the highest levels. Curran and his team work with celebrities, athletes, multi-generational family foundations, and other affluent givers who need guidance in directing their philanthropic efforts. It’s a growing area of interest: Over half of affluent households with a net worth between US$5 million and US$20 million have, or are planning to establish, “some kind of giving vehicle” within the next three years, according to the Bank of America report.

Corporate philanthropy, rather than individual giving, is the cornerstone of Marcus Selig’s work as chief conservation officer at the National Forest Foundation, a Congressionally chartered non-profit based in Montana responsible for protecting millions of acres of public lands.

“Our outlook is business as usual,” he says, advising that giving may slow down, but not enough for the foundation to change course.

Factors such as political polarisation in the U.S. and the wars in Eastern Europe and the Middle East are pushing nonprofits to consider their niche, and how they might work with other groups, both on the corporate and philanthropic levels, Selig says.

“It leads to a little more sharing on the ground in what needs to be done,” he adds.

Steve Kaufer , founder of Massachusetts-headquartered e-commerce giving platform Give Freely and founder of TripAdvisor, says that the economy has a much bigger role in election years, as he looks to build and grow something that can act as a “counterbalance.”

“There’s a trend towards democratisation, and acting collectively can lead to greater impact,” he says.

Kaufer’s new platform hopes to leverage the everyday philanthropist through online shopping dollars to benefit major charity partners like UNICEF and charity:water, who earn funds as shoppers choose an organisation to benefit through an online clickthrough process.

“Whether a good year or bad year, e-commerce will continue to keep growing,” he says. “Nobody doubts that.”

Whether a legacy foundation, corporation or individual, the political landscape this year is requiring some to exercise caution as they consider what their own charitable actions might be and how it could be viewed more broadly. For the personal philanthropist, every move is now scrutinised more closely. On the nonprofit side, entities are exercising more due diligence to understand if a specific donor aligns with their mission and that there aren’t any underlying issues that could cause greater pushback.

“You have to be able to walk the walk,” Huston says. “For example, we’ve had to turn down very large donor checks from corporations because there’s a Reddit stream calling them out on their human rights practices.”

She adds that even a routine charity activation could now be aligned with a political party, and that adds complexities to how a higher-profile organisation like Six Degrees can activate, especially as the film Footloose turns 40 in 2024 (which Bacon starred in).

“A lot of organisations and states want to align themselves with this feel good moment, and we should be able to stand side by side with everyone, but we have to be aware,” she says.

Another topic attracting donor interest today is  mental health, an area that historically has been underfunded and under-resourced by philanthropy, according to Two Bridge partner Harris Schwartzberg, who has been closely linked to the mental health space for more than a decade.

Today, the issue for mental health nonprofits is less about resources and more about societal divisiveness and polarisation around the topic. There’s an “overwhelming demand” for solutions, but the space is in a “perfect storm” for the broader political issues to make things worse, Schwartzberg says.

In Curran’s opinion, the storms brewing are troublesome, but they are also creating new opportunities for corporate and personal giving. The  current state of philanthropy is one of “dynamic, expansive, and blurred lines,” meaning a careful blending of targeted giving combined with an understanding of the broader geopolitical landscape could lead to a successful overall philanthropic strategy.

“There are a lot of headlines that distract, but shouldn’t,” he says. “2024 needs more serious philanthropists than ever.”

MOST POPULAR

Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Related Stories
Money
He Stole Hundreds of iPhones and Looted People’s Life Savings. He Told Us How.
By JOANNA STERN 21/12/2023
Money
Don’t Roll Your Eyes: Looking the Part Could Land You That Job
By ANNE MARIE CHAKER 05/12/2023
Money
Banks Earn Billions Thanks To Higher Interest Rates
By Bronwyn Allen 16/11/2023
0
    Your Cart
    Your cart is emptyReturn to Shop