Growth Rates of 3 Percent ‘Relic of Economic History,’ IHS Finds
June 16 2015 - 9:00AM
Business Wire
Potential growth in advanced economies to average 1.8 percent
from 2020-2045; Asia-Pacific will have five highest potential
growth markets in the same period
The long-term potential growth rate for advanced economies will
decelerate to an average of 1.8 percent, down from average
potential growth of 2.5 percent during 1990–2007, according to an
analysis utilizing the Global Link Model from IHS Inc. (NYSE: IHS),
the leading global source of critical information and insight.
Although actual real gross domestic product (GDP) growth will
fluctuate over business cycles and may well exceed 2.5 percent, or
even 3.0 percent, the longer-term trend growth rate for advanced
economies is 1.8 percent. For the United States, long-term growth
potential is 2.3 percent per year.
In the long-term (2020–2045), the five economies with the
highest potential growth are all in Asia-Pacific (in descending
order): India, Vietnam, Philippines, Indonesia, and China. The next
five highest potential growth countries are in Latin America, North
Africa, and Sub Saharan Africa: Chile, South Africa, Peru, Egypt,
and Angola.
The countries with the lowest long-term potential growth rates
tend to be advanced economies, where demographic factors are most
likely to impinge on growth. In the long-term, the five economies
with the lowest potential growth rates are Japan, Italy,
Switzerland, Kuwait, and Portugal.
Potential real GDP measures an economy’s productive capacity and
it is assumed that in the long run, the short-term imbalances that
cause business cycles are smoothed out such that actual real GDP
converges to potential. Long-term growth is determined by the
available labor supply, available private and public capital stock,
energy infrastructure and total factor productivity (TFP).
The IHS Global Link Model links 68 individual country
models—accounting for 95 percent of global GDP— with each other and
with global drivers of economic performance. Learn more about the
IHS Global Link Model.
About IHS
(www.ihs.com)
IHS (NYSE: IHS) is the leading source of insight, analytics and
expertise in critical areas that shape today’s business landscape.
Businesses and governments in more than 150 countries around the
globe rely on the comprehensive content, expert independent
analysis and flexible delivery methods of IHS to make high-impact
decisions and develop strategies with speed and confidence. IHS has
been in business since 1959 and became a publicly traded company on
the New York Stock Exchange in 2005. Headquartered in Englewood,
Colorado, USA, IHS is committed to sustainable, profitable growth
and employs about 8,800 people in 32 countries around the
world.
IHS is a registered trademark of IHS Inc. All other company and
product names may be trademarks of their respective owners. © 2015
IHS Inc. All rights reserved.
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IHS Inc.Kate Smith, +1
781-301-9311kate.smith@ihs.comorPress Team+1
303-305-8021press@ihs.comTwitter: @IHS_News
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