2020-2024 GDP Growth Forecasts for Developed Economies
A Hard Road Back
Most developed economies found it hard to generate growth in the years following the Global Financial Crisis in 2008 and 2009. This resulted in a shift in global economic power from the developed world to emerging markets, primarily large Asian emerging markets.
Now, with the Covid-19 pandemic devastating developed and emerging economies, there is a strong chance that the recovery in emerging markets (again mostly those in Asia) will far outpace the recoveries in most developed economies. In fact, some less-competitive developed economies might not see economic output return to pre-pandemic levels until the second half of the 2020s, and many of these economies had already been struggling to generate significant growth before the pandemic.
Developed economies in North America, and some in the Asia-Pacific region, are forecast to return to growth faster than their counterparts in Europe or Japan, as they had been generating more growth before the pandemic. This is due to the fact that these economies' domestic markets have higher growth ceilings, and for economies such as the United States and South Korea, they have a strong presence in many high-tech and high-growth industries. In contrast, economies such as Italy, France and Japan have much lower domestic growth ceilings, and have been struggling to compete for export markets and foreign investment. This will make it harder for them to generate consistent economic growth, even after the pandemic has ended.