Six years after the global financial crisis, GDP growth for a majority of the world economies
has shifted to a noticeably lower path compared to pre-crisis levels. Excluding the three years
of 2008-2010, which featured, respectively, the eruption of the financial crisis, the great
recession and the policy-driven rebound, four fifths of the world economies have seen
average growth in 2011-2014 that was lower than the average growth in 2004-2007 (figure 2).
At issue is whether such a shift to a lower path of growth in most countries will become
entrenched for a long period. According to some pessimistic views, major developed
economies are highly likely to be entrapped in a secular stagnation (box 2), while
policymakers in China have indeed taken growth of 7.0-7.5 per cent as the new normal for
the Chinese economy, compared with the average growth of 10 per cent that China achieved
in the previous three decades. Many other large emerging economies, particularly outside
Asia, have also seen a much slower growth trajectory in recent years as internal weaknesses
interact with challenging external conditions.