According to the Telegraph, without a "miracle" in the economy, younger generations will have less money than their parents

Without a growth "miracle," the World Bank has cautioned that young people today won't see the same increase in living standards as their parents.

Its chief economist, Franziska Ohnsorge, stated that quick action was required to counteract a slowdown in conventional elements that raise living standards, including as investment and advancements in educational standards and business efficiency.

As increased interest rates hit the world, the World Bank issued a warning that the global economy will slow significantly this year, adding that many emerging nations risked entering a financial catastrophe.

Global growth is anticipated to slow to 2.1 percent in 2023 from 3.1 percent in 2022.

While this reflects an overall improvement over its prior expectation from January, Ms. Ohnsorge noted that predictions for "nearly all advanced economies" and 70% of developing economies had been cut back.

Additionally, the growth estimate for 2024 was decreased by 0.3 percentage points to 2.4 percent.

The World Bank also cautioned that until at least 2025, central banks worldwide would find it difficult to achieve their inflation objectives and that going forward, it would be "harder to bring inflation down" because economies would have less opportunity to expand before overheating.

The Bank of England has previously acknowledged that the UK's inflation rate is likely to exceed its 2 percent goal for the next two years.

The World Bank added that many developing countries were now "sailing in dangerous waters" because of predictions that the US Fed may need to hike interest rates further in order to manage inflation, even if many had only seen "limited harm" from the recent US financial turmoil.

Ms Ohnsorge cautioned that unless more was done to support productivity-enhancing development in sectors like as investment and education, growth in living standards would continue to decline over the next several decades.

"It's a widespread decline in all the drivers of growth you can think of," she said. “In part because so much has been achieved already over the 2000s and 1990s. Therefore, these tendencies will continue slowing until there is a significant structural shift”.

Policymakers, according to Ms. Ohnsorge, are still denying the reality of the ageing population. In modern economies, people are reluctant to work past the traditional retirement age of 65, but politicians are making plans under the assumption that many will.

You may also argue that because essentially underlying growth momentum is declining, it will be more difficult to reduce inflation.

(Sources: telegraph.co.uk)