The long and winding road Economic growth around the world since the crisis has repeatedly surprised economists on the downside and has led to the term: “serial disappointment.” The Bank of Canada’s own forecasts overestimated global growth by an average of half a percentage point each year in the past four.
Private sector consensus forecasts were off by even more.1 The slow and halting recovery is partly the result of a number of cyclical factors that are taking years to sort out, including deleveraging in the private and public sectors. It is also the result of deeper structural trends that are driving down the global economy’s potential to grow.