IMF calls on rich nations to boost public investments

The IMF recently published a report asking advanced economies to worry less about their public debt and instead to begin increasing investments on infrastructure by taking advantage of low borrowing costs. These investments would be in digital infrastructure and green technology.


The advantage of this would not only be the more advanced technology and improvement in infrastructure, but the creation of millions of jobs in the EU and elsewhere, which is taking a more Keynesian view. But this expenditure has strong backing, as it is a public investment in the new economy, rather than existing assets, which is likely to lead to further opportunities


However, one problem would be the likelihood of the expenditure being poorly managed, and lead to further costs (such as the HS2). Secondly, significant expenditure by the government may lead to a crowding out of the private sector, especially due to the current weak activity following COVID.