An outlook from IMF that triggers worrying thoughts : Excerpts only

WHERE ARE WE HEADED? PERSPECTIVES ON POTENTIAL OUTPUT[1]

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• Potential output growth across major advanced and emerging market economies has declined in recent years. In advanced economies, this decline started as far back as the early 2000s.
• Unlike previous crises, the global financial crisis has been associated not only with a reduction in the level of potential output in advanced and emerging market economies, but also with a persistent reduction in its growth rate.
• Potential growth in advanced economies is likely to increase slightly from current rates but remain below pre-crisis rates in the medium term. The main reasons are aging populations and the slow increase in capital growth from current rates as output and investment recover gradually from the crisis.
• In emerging market economies, potential output growth is expected to decline further in the medium term, because of ageing populations, weaker investment, and lower productivity growth as technological gaps between these economies and advanced economies get narrower.
• Reduced prospects for potential growth will raise new policy challenges such as achieving fiscal sustainability. Increasing potential output will need to be a priority in major advanced and emerging market economies."

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[1] World Economic Outlook, April 2015 Prepared by Patrick Blagrave, Mai Dao, Davide Furceri (team leader), Roberto Garcia-Saltos, Sinem Kilic Celik, Annika Schnücker, Juan Yepez, and Fan Zhang; http://www.imf.org/external/pubs/ft/weo/2015/01/pdf/3sum.pdf