The Covid-19 crisis has caused an unprecedented contraction of the global economy.
While it is remarkable how quickly and decisively governments and central banks reacted to the pandemic to bolster their economies, prevent the collapse of financial markets and seek to preserve jobs, our attention must now turn to how to deliver a sustainable economic recovery.
The overarching challenge is neither cyclical nor, indeed, Covid-related, but structural — as growth has been declining for decades and prospects are currently poor. Potential annual growth has fallen from over three per cent to less than two per cent over the past 40 years and annual productivity growth has fallen to less than one per cent over the past decade.
