2020 | 2024 | |
Population | 7.8 billion | 8.2 billion |
Absolute poverty rate | 9.7% | 9.0% |
GDP (real 2024 dollars) | $93.8 trillion | $110.7 trillion |
(U.S.) | ($25.4 trillion) | ($29.2 trillion) |
Trade flows | $22.7 trillion* | ~$33 trillion |
Operating satellites | ~2,500 | ~9,500 |
Live submarine cables | 400 | 600 |
Container-ship capacity | 25.8 million TEU | 32 million TEU |
Widebody freighter air fleet | 2,010 | 2,340 |
* Anomalously low due to COVID-19 economic closures. The 2019 total was $25.0 trillion.
WHAT THEY MEAN:
Peering into the near future in its “World Economic Outlook” update last Thursday, the International Monetary Fund sees a “normalizing” 2025 for the world economy. The Fund’s mighty banks of computers, integrating figures on savings rates, energy costs, retirements, fiscal balances, investment levels, debt loads, and the like, arrive at projections of worldwide growth of 3.3%, fading inflation, and interest rates possibly trending down. Economic Counsellor Pierre-Olivier Gourinchas summarizes the “data-driven” outlook:
“We project global growth will remain steady at 3.3% this year [as against 3.2% in 2024 and 2023], broadly aligned with potential growth … inflation is declining, to 4.2% this year and 3.5% next year, which will allow further normalization of monetary policy. This will help draw to a close the global disruptions of recent years, including the pandemic and the Russian invasion of Ukraine.”
Dr. Gourinchas goes on to note some variability of growth among big economies, noting that the U.S. and China are the relatively strong-growth big economies, though both with some asterisks. China’s boom era is past: its 4.5% growth projection is now similar to the 4.2% the IMF sees for other “emerging economies” and the 4.1% for low-income countries, and well below India’s 6.5%. Benefiting from relatively high productivity growth, meanwhile, American living standards are “pulling away from those of other advanced economies”; but the U.S. has higher inflation risk than its peers for other reasons: a likely rising budget deficit, plus immigration and tariff plans seen as stagflationary.* Continental Europe, on the other hand, is slower than it should be, with 1.0% growth — a bit below the 1.6% for the U.K. and the 1.1% for Japan.
The projections suggest general calm, a prospering if not booming world, and the sort of problems that usually come up in normal times. Data cited above from other venues — trade flows, rising air and maritime logistical capacity, rapid satellites and fiber-optic cable deployment, a slowly falling rate of deep poverty — all seem to say this needn’t stop any time soon. So here’s J.M. Keynes in The Economic Consequences of the Peace (1919) to remind us of how quickly and badly things can go wrong when — despite equations, data, and rational predictions drawn from them — governments and publics make poor choices:
“What an extraordinary episode in the economic progress of man that age was, which came to an end in August, 1914! … [For] the middle and upper classes, life offered, at a low cost and with the least trouble, conveniences, comforts, and amenities beyond the compass of the richest and most powerful monarchs of other ages. The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend.”
“[H]e regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous, and avoidable. The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper, and appeared to exercise almost no influence at all on the ordinary course of social and economic life.”
Back to the IMF for the last word: Dr. G. is more alert to this sort of risk than was Keynes’ wealthy and oblivious Londoner just before the First World War. His closing comment steps back from data-driven optimism to anxiety about policy and human choices:
“Finally, additional efforts should be made to strengthen and improve our multilateral institutions to help unlock a richer, more resilient, and sustainable global economy. Unilateral policies that distort competition—such as tariffs, nontariff barriers, or subsidies—rarely improve domestic prospects durably. They are unlikely to ameliorate external imbalances and may instead hurt trading partners, spur retaliation, and leave every country worse off.”
* Direct quote on mass deportations and tariff increases: “Will play out like negative supply shocks, reducing output and adding to inflation.”
The IMF’s Gourinchas on the year ahead.
… and the full “World Economic Outlook” update.
Keynes’ Economic Consequences of the Peace (1919).
And the Biden administration’s last word on the economy.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.