cover image: The Global Investment Slowdown : Challenges and Policies (English)


The Global Investment Slowdown : Challenges and Policies (English)

15 Mar 2023

Investment growth in emerging market and developing economies (EMDEs) is expected to remain below its average rate of the past two decades through the medium term. This subdued outlook follows a decade-long, geographically widespread investment growth slowdown before the COVID-19 pandemic. An empirical analysis covering 2000-21 finds that periods of strong investment growth were associated with strong real output growth, robust real credit growth, terms of trade improvements, growth in capital inflows, and investment climate reform spurts. Each of these factors has been decreasingly supportive of investment growth since the 2007-09 global financial crisis. Weak investment growth is a concern because it dampens potential growth, is associated with weak trade, and makes achieving the development and climate-related goals more difficult. Policies to boost investment growth need to be tailored to country circumstances, but include comprehensive fiscal and structural reforms, including repurposing of expenditure on inefficient subsidies. Given EMDEs' limited fiscal space, the international community will need to significantly increase international cooperation, official financing and grants, and leverage private sector financing for adequate investment to materialize.
economic growth world macroeconomic and structural policies


Stamm,Kersten Kevin, Vorisek,Dana Lauren

Disclosure Date
Disclosure Status
Doc Name
The Global Investment Slowdown : Challenges and Policies
Published in
United States of America
Series Name
Policy Research working paper ; no. WPS 10364;
Unit Owning
Prospects Group (DECPG)
Version Type
Volume No