In his book "The Progress Paradox: How Life Gets Better While People Feel Worse," Gregg Easterbrook, senior editor at the New Republic and contributing editor to The Atlantic, castigates the media for dwelling on minor problems without celebrating the broader, more upbeat context in which they exist. One of the broader, more upbeat events of recent years is the significant and dramatic increase in real GDP per-capita worldwide.
Using world GDP data from the IMF and world population data from the U.S. Census Bureau, the chart above shows real world GDP per-capita from 1985 to 2013 (data from 2008 - 2013 are estimated). After remaining constant at about $5,000 for 15 years from 1987 to 2002, real GDP per capita will increase 60% from $5,000 in 2002 to an estimated $8,000 this year. After leveling out for a year in 2009 due to the global economic slowdown (see arrow above), growth in per-capita real output is expected to resume in 2010 and exceed $9,000 by 2013.
Bottom Line: The 60% growth in world per-capita real GDP between 2002 and 2008 is probably one of the greatest periods of economic growth in such a short period of time in history, and is definitely part of the broader, more upbeat context of this period in history.
According to the International Monetary Fund's most recent economic outlook, world real GDP growth is projected to slow from 5% in 2007 to 3.75% percent in 2008 and then to 2.2% in 2009 (see chart above), with the downturn led by advanced economies.
Looking forward, the IMF predicts that world real GDP will rebound to above-average growth rates of 4.2% (2010), 4.8% (2011), 4.8% (2012) and 4.7% (2013). Growth for the advanced economies is forecast to be above 2% by 2010, with even higher growth of between 2.5% to 3% between 2011 and 2013.
Bottom Line: If the IMF forecast is accurate, the current global economic slowdown will produce only one year of below-average world output growth (2.2% in 2009), which will follow six years of strong world economic growth above the 3.46% post-1980 average (see chart), and an above-average expansion of the world economy will resume in 2010 with at least four years of real GDP growth close to 5%. Moreover, if the IMF is correct, the predicted global economic slowdown of 2009 will be roughly equivalent to the world slowdown in 2001, and much less severe than the slowdowns in 1990-1991 and 1980-1982.