Question

What are the prospects and challenges of the world economic growth?

Answer 1

Soln. The prospects of the world economic growth are listed below -

1. Global growth rate is expected to remain at 3 percent for the years 2019 and 2020

2. The world economy is going through a confluence of risks, which could impact economic activity and inflict significant damage on longer-term development prospects globally.

3. Major risks as highlighted in point 2 above includes trade disputes and differences among nations, certain and abrupt changes in financial conditions, and some natural occurring phenomena such as intensifying climate risks.

The challenges of the world economic growth are listed below -

1. Faster growing economies are facing increase in inflation as a result of increase in demand ahead of aggregate supply.

2. Fast global economic growth results in severe environmental concerns such as the depletion of the global resource base and the impact of global warming, a huge expansion of waste and pollution, over-population etc.

3. Global economic growth also results in increased income and wealth inequality.