Chart of the Week: Grading the G-20 on its Growth Goals

IMF Blog, November 19, 2018

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Publication date: November 19, 2018.
The global expansion remains strong; the IMF’s 2018 report gives the G-20 good grades on the short-term outlook.
Compared to last year’s report:
- Output gaps have been closing (actual output is closer to potential).
- Fewer people are unemployed.
- Risks to the outlook have increased.

Progress toward more sustainable and balanced growth is slow:
- External excess imbalances (surpluses and deficits) persist.
- Debt levels remain high.
- Productivity growth remains low.
Inclusion is a new area of analysis in this year’s report and remains a challenge.

After 1990, inequality as measured by the Gini coefficient rose across most G-20 economies.
- Some emerging economies experienced declines in inequality (noted examples include many Latin American countries and Turkey), but their inequality remains higher than in G-20 European and North American countries, which saw increases.
Income gains since the financial crisis have been highly uneven:
- Across the G-20, earners in the bottom 10 percent of the income distribution, on average, earn only 8 percent of what earners in the top 10 percent make.
Persistent inequalities reflect and reinforce uneven access to economic opportunities such as education, health care, and financial services.

Acting now and coordinating policies across the G-20 can:
- Sustain strong global growth over the medium term.
- Make growth more balanced and more widely shared.
Many measures that lift productivity over the medium and long term will also make growth more inclusive.
- The IMF estimates these measures will increase the level of G-20 GDP by close to 4 percent.

Investment in human capital:
- Strengthen education and workers’ skills to help economies adjust to new technologies and ensure broader sharing of technological gains.
Financial inclusion and social insurance:
- Enhance financial inclusion.
- Adjust social safety nets and insurance systems to facilitate mobility across jobs, sectors, and borders.
Redistribution:
- Taxes and transfers will continue to play a major role in achieving more inclusive growth.
Cooperation to contain risks:
- Policymakers must work in parallel and together to contain risks, which will also help reduce inequality.
- Reducing barriers to trade in services can temper risks from excess external imbalances, reduce trade tensions, and help lift incomes.

The G-20 Surveillance Note was scheduled to be released on November 27 and will outline how policymakers must work together to contain risks and promote inclusive, sustainable, and balanced growth.

Source: Chart of the Week: Grading the G-20 on its Growth Goals (IMF blog), November 19, 2018.

Group of Twenty: Future of Work: Measurement and Policy Challenges, July 18, 2018
- Group of Twenty: Future of Work: Measurement and Policy Challenges, July 18, 2018 (Markdown version)
- Group of Twenty: Future of Work: Measurement and Policy Challenges, July 18, 2018 (PDF)
G-20 Report on Strong, Sustainable, Balanced, and Inclusive Growth, November 19, 2018
- G-20 Report on Strong, Sustainable, Balanced, and Inclusive Growth, November 19, 2018 (Markdown version)
- G-20 Report on Strong, Sustainable, Balanced, and Inclusive Growth, November 19, 2018 (PDF)