They predict the natural rates – the real interest rate that neither stimulates nor contracts the economy – in advanced markets “will likely remain low”, while those in emerging markets are likely to fall to the same levels over the long term.
That would mean interest rates could fall towards the lows seen in the pandemic, which saw interest rates drop from 0.75 percent to just 0.1 percent in early 2020 in the UK.
The natural rate is an important reference point for monetary and fiscal policy, which helps central banks set interest rates to curb inflation without driving people out of work.
This analysis features in the World Economic Outlook report for April 2023, which will be released today (April 11) at 2pm.
READ MORE: Lloyds Bank warning after woman loses £100,000 to cruel fraud
