G20 investment can boost global GDP

IMF official says infrastructure spending may lift output by nearly 2% by 2025

WASHINGTON:

The International Monetary Fund (IMF) estimates that synchronised investment in infrastructure by Group of 20 major economies could boost global output by nearly 2% by 2025, a senior IMF official said on Tuesday.

Deputy Managing Director Antoinette Sayeh told the Rome Investment Forum the global economy had begun to climb back from the depths of Covid-19 crisis, but resurgence in infections was delaying the recovery and setbacks were possible. She said it was vital to bring the health crisis under control through international investment in vaccines, continue fiscal support to prevent cascading bankruptcies, and boost investment in green and digital infrastructure.

Sayeh said significant progress on development of Covid-19 vaccines was encouraging, but international cooperation was needed to manufacture, purchase and distribute them to all countries, including the poorer ones. She repeated the IMF’s estimate that quick and wide sharing of progress on medical solutions could add almost $9 trillion to global income over the next five years, which would also address a widening income gap between poorer and richer nations.

It was also critical to continue fiscal support, such as cash transfers to households, retention support and augmented unemployment benefits that have or are due to expire, Sayeh said. At the same time, investment in digital and green infrastructure would lay the foundation for more sustainable and inclusive future growth.

Sayeh said the IMF forecast that global GDP would increase by close to 2% by 2025 if G20 countries with the largest spending power simultaneously raised infrastructure spending by 0.5% of GDP in 2021.

Published in The Express Tribune, December 16^th, 2020.

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