Global prospects and policy challenges G 20 – Finance Ministers and Central Bank Governors’ Meetings published by IMF (2016).
“’Brexit’ marks the materialization of an important downside risk to global growth. The global outlook, set for a small upward revision prior to the U.K.’s referendum, has been revised downward modestly for 2016 and 2017, reflecting the expected macroeconomic consequences of a sizable increase in economic, political, and institutional uncertainty. But with “Brexit” still very much unfolding, more negative outcomes are a distinct possibility.
This setback comes against a background of already weak underlying growth caused by a combination of persistent and interlinked forces. These include: (i) the pre-crisis trend of slowing total factor productivity growth, compounded by population aging; (ii) the crisis legacy of debt overhang in advanced economies and rising corporate leverage and pockets of excess capacity in emerging economies; and (iii) the scarring of productive capacity, following the crisis, caused by persistent low investment and high unemployment. Not only is growth low, in many cases it has also been shared unequally. This can create more challenges by undermining support for reform as well as for openness to trade and migration…”
