IMF urges countries to make more infrastructure investments to spur the post-Covid-19 recovery

Oct 6, 2020 | 1 comment

The International Monetary Fund on Monday said that member governments should use low-interest loans to invest in infrastructure to drive recovery from the coronavirus pandemic and a shift toward greener energy.

International Monetary Fund headquarters in Washington, D.C.

In its publication Fiscal Monitor, the IMF said its research shows public investment in infrastructure, including investments in health care systems, digital infrastructure and addressing climate change can pay back more than two to one in economic growth within two years.

The full Fiscal Monitor will be presented at the IMF and World Bank annual meetings, which get underway next week and will provide an updated assessment of the pandemic’s effect on the global economy.

The IMF said increasing public investment by 1% of GDP in advanced and developing economies would grow their GDP by 2.7%, creating 7 million jobs directly, and between 20 million and 33 million jobs overall when considering the indirect macroeconomic effects.

“Even before the pandemic, global 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, and more in most emerging and developing economies,” IMF Fiscal Affairs Director Vitor Gaspar said in a blog post.

He added that “low interest rates globally also signal that the time is right to invest” despite the Fund’s frequent warnings about a massive buildup of debt in developing countries.

Some countries with tighter financing conditions will have to take a more gradual approach to scaling up infrastructure development, but the improved growth prospects could pay off if projects are well-managed and set the stage for future growth.

“Investment is now urgently required in sectors critical to controlling the pandemic, such as health care, schools, safe buildings, safe transportation, and digital infrastructure,” The IMF said in its report.

The Fund said public investment in infrastructure is feasible and can be delivered quickly if governments invest in maintenance of infrastructure, review and restart projects that were shelved at the start of the pandemic, speed up projects in the pipeline and plan immediately for a post-pandemic investments.

It said official aid for adaptation to climate change would pay back more than 100% in growth, and there is a need to double a currently planned $10 billion to adapt countries to climate change to around $25 billion.

CuencaHighLife

Dani News

Google ad

The Cuenca Dispatch

Week of May 26

Cleaning and Rock-Filling Work Completed at Coca Codo Sinclair Plant.

Read more

Germany Advises Ecuadorian Exporters to Comply with European Union Standards: Impacts on Cocoa, Coffee, and Palm.

Read more

The True Cost of Extra and Ecopaís Gasoline Subsidies.

Read more

Hogar Esperanza News

Google ad

Fund Grace News