LONDON — When the world’s business and political leaders gathered in 2018 at the annual economic forum in Davos, Switzerland, the mood was jubilant. Growth in every major country was on an upswing. The global economy, declared Christine Lagarde, then the managing director of the International Monetary Fund, “is in a very sweet spot.”
Five years later, the outlook has decidedly soured.
“Nearly all the economic forces that powered progress and prosperity over the last three decades are fading,” the World Bank warned in a recent analysis. “The result could be a lost decade in the making — not just for some countries or regions as has occurred in the past — but for the whole world.”
A lot has happened between then and now: A pandemic hit; war erupted in Europe; tensions between the United States and China boiled. And inflation, thought to be safely stored away with disco album collections, returned with a vengeance.
But as the dust has settled, it has suddenly seemed as if almost everything we thought we knew about the world economy was wrong.
The economic conventions that policymakers had relied on since the Berlin Wall fell more than 30 years ago — the unfailing superiority of open markets, liberalised trade and maximum efficiency — look to be running off the rails.
During the COVID-19 pandemic, the ceaseless drive to integrate the global economy and reduce costs left health care workers without face masks and medical gloves, carmakers without semiconductors, sawmills without lumber and sneaker-buyers without Nikes.
Read more at: https://economictimes.indiatimes.com/small-biz/trade/exports/insights/why-it-seems-everything-we-knew-about-the-global-economy-is-no-longer-true/articleshow/101095522.cms
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