Economy
OECD Projects Slowing Global Growth, Rising Income Equality to 2060
Published:
A new study from the Organisation for Economic Co-operation and Development (OECD) projects that global economic growth will slow and income inequality will continue to rise to 2060. The “Policy Challenges for the Next 50 Years” report was presented in Tokyo by OECD Deputy-Secretary General and Acting Chief Economist Rintaro Tamaki.
Growth in global gross domestic product will slow from an annual average of 3.6% in the 2010 to 2020 period to an estimated 2.4% in 2050 to 2060, the study finds. This will be brought on by the aging populations in many OECD countries and the decelerating growth rates in the large emerging economies.
Rising inequalities will continue to threaten growth by blocking economic opportunities, suggests the OECD. Shrinking income gaps between advanced and emerging economies will reduce the incentives for economic migration into advanced countries. The resulting fall in immigration will add to demographic pressures caused by aging populations. Compared with current trends, the labor force in the United States could be reduced by 20% in the United States and by 15% in Europe by 2060.
Other forecasts in the report include:
- Innovation and investment in skills will be the predominant drivers of growth.
- The share of trade with and among the emerging economies will increase dramatically.
- Rising economic interdependence will require international cooperation in such areas as basic research, intellectual property rights, competition policy and climate change mitigation.
- Unless CO2 emissions are reduced, climate change could curb global GDP by 1.5% by 2060. In South and Southeast Asia, that decline could be almost 6%.
Tamaki said:
The study shows we face a globalization paradox — countries will be more integrated than ever before, but it may become increasingly difficult to organize the required international cooperation in a more complex multipolar system.
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