Covid-19: Public investment key to recovery
Public investment should play a “central role” in the recovery of both emerging and advanced economies from the coronavirus downturn, the IMF said on Monday ahead of its fall meetings. Stepping up such spending with interest rates low globally could “create millions of jobs directly in the short term and millions more indirectly over a longer period,” officials with the International Monetary Fund wrote in a blog post. Assuming investments are of “high quality”, the Washington-based crisis lender said increasing public investment by 1% of GDP could raise private investment by 10%, employment by 1.2%, GDP by 2.7% along with overall confidence in the recovery. The coronavirus pandemic has caused a sharp economic downturn globally, but even before the pandemic, the IMF said, public investment “had been weak for over a decade, despite crumbling roads and bridges in some advanced economies and massive infrastructure needs for transportation, clean water, sanitation” in poorer nations.
Published in The Express Tribune, October 6th, 2020.
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