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Calling global economic growth dangerously slow is a myth, DBS says


New recruits listen to speeches during the welcome ceremony for new employees of All Nippon Airways Holdings (ANA) at ANA hanger on April 1, 2015 in Tokyo, Japan.

Chris McGrath | Getty Images

New recruits listen to speeches during the welcome ceremony for new employees of All Nippon Airways Holdings (ANA) at ANA hanger on April 1, 2015 in Tokyo, Japan.

In the July update of its World Economic Outlook, the International Monetary Fund forecast global economic growth of 3.5 percent for 2017 and 3.6 percent for 2018, unchanged from its April outlook.

The IMF report urged countries to pursue structural reforms, such as commodity exporters diversifying their economies, amid concerns about “shocks” upsetting the apple cart.

But Carbon said economic growth wasn’t in the danger zone when it’s “looked at the way it should be: in per-capita terms,” with slower gross domestic product growth due mainly to slower working-age population growth.

“Per person of working age, growth doesn’t appear to have slowed at all since 1980,” he said. “To the extent that slower growth results from slower population growth, the response should be: who cares? It’s growth per person that matters — your income, my wage — not growth in the aggregate.”

Carbon noted that the working-age population growth was falling much more rapidly than population growth overall.

He pointed to Japan, where the population as a whole fell by 0.2 percent in 2016, while the working age population fell five times more rapidly, by 1 percent each year.

Europe and the U.S. changes weren’t quite as stark, but still showed the same pattern, Carbon said, noting a 0.1 to 0.2 percent decline in Europe’s working-age population, while in the U.S. that group was growing at 0.4 percent a year, down from 1.2 percent a year a decade ago.

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