"The Global Economy Will Experience a Decade of Low Growth"

[Asia Economy Reporter Yujin Cho] An analysis has emerged suggesting that the global economy, plagued by record inflation, will not escape a low-growth phase over the next decade.

On the 28th (local time), Daniel Lacalle, Chief Economist at global asset management firm Tresis Gestion, forecasted this in an interview with CNBC's Squawk Box Europe, citing prolonged Russian invasion of Ukraine, economic slowdowns in China, Europe, and the United States as reasons.

He stated, "Even if advanced economies manage to achieve a growth rate in the 1% range next year, the global economy will experience very sluggish growth over the next ten years," adding, "The greatest concern is the unprecedented inflation situation."

Although there are prospects that inflation worldwide may have peaked, concerns are rising over a global economic downturn as inflation rates are not expected to fall rapidly, and central banks in various countries continue to raise interest rates in response.

[Image source=Reuters Yonhap News]

He identified China's economic reopening as a key variable for next year's economic situation. He said, "The most positive event the market can expect next year is the possibility of China's full economic reopening," and predicted, "China's economic reopening will act as a major driver of the global economy." He added, "Countries with high export dependence on China, such as Germany, France, Latin America, and Africa, can have expectations regarding China's economic opening."

However, he also forecasted that despite the stimulus effects from China's economic reopening, growth levels will not approach those of the years before the COVID-19 pandemic.

This outlook is more pessimistic than the recent projections by the IMF (International Monetary Fund). The IMF warned that the global economic growth rate will remain in the 2% range next year. Although inflation is expected to slow compared to this year, high inflation exceeding price stability targets is anticipated to persist.

The IMF stated, "A growth rate in the 2% range is the weakest growth since 2001, excluding the global financial crisis," and predicted, "Inflation will slow from 8.8% this year to 6.5% next year and 4.1% in 2024, but it will still exceed the price stability targets set by central banks worldwide."

This content was produced with the assistance of AI translation services.