We estimate that over the last two years potential output has grown by a little over 2 percent annually, compared with average GDP growth of 2.7 percent. This gap between the actual growth rate and the potential growth rate increases pricing pressures in the economy. Some factors are constraining the recovery in potential output growth.
More than 90% of those who have perished owing to extreme weather events during the last half-century lived in these countries, where more than 70% of reported disasters occurred.4 The path forward is clear: we must forge ahead with a global transition to ensure our economies are future-proof.