Governments can't take their resilience for granted
Somewhat unexpectedly, the global economy has weathered the challenges of the past few years extraordinarily well. Following the pandemic, shock followed shock — Russia’s war on Ukraine, Washington’s rejection of rule-based liberal trade, then most recently the war with Iran. Any one of these might’ve led you to expect a severe economic setback, let alone all three combined. Yet global output…
Despite expectations, the world economy has performed remarkably well over the past few years, despite facing a series of shocks. From the COVID-19 pandemic, to Russia's invasion of Ukraine, to the U.S.'s withdrawal from liberal trade rules, to the latest conflict with Iran, one might have anticipated significant economic setbacks.
However, global output has continued to grow. The International Monetary Fund's latest World Economic Outlook attempts to explain this phenomenon and issues a caution to governments. While the system's resilience has been impressive, the IMF's economists acknowledge that there are limits to this performance. They have been caught off guard by the steady growth, often underestimating year-ahead global growth in their annual forecasts since 2023.
Currently, the IMF expects global output to grow by 3.1 percent this year and 3.4 percent in 2027, recognizing that some countries are performing better than others. This trend has favored nations with two notable traits: limited exposure to energy markets and political stability.
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- Governments can't take their resilience for granted koreatimes.co.kr
