IMF "Increasing Public Investment by 1% Leads to 2.7% Growth in 2 Years"... Advanced Countries Must Boost Investment"

[Asia Economy Reporter Jeong Hyunjin] The International Monetary Fund (IMF) estimated that increasing public investment by 1% of Gross Domestic Product (GDP) could lead to 2.7% economic growth in two years. This emphasized that advanced countries need to expand public investment in infrastructure and other areas to recover the economy from the COVID-19 pandemic.

On the 5th (local time), the IMF stated on its blog that if public investment is increased by 1% of GDP, the growth rate could rise as estimated, and private investment and employment could increase by 10% and 1.2%, respectively. It analyzed that investing one million dollars in existing infrastructure creates 2 to 8 jobs, and investing one million dollars in research and development (R&D) creates 5 to 14 direct jobs.

The IMF said, "Governments must prepare for the post-COVID-19 global transition," adding, "Expanding public investment in advanced and emerging countries can create millions of jobs in the short term and also generate indirect jobs in the long term."

In particular, the IMF evaluated that with ultra-low interest rates continuing worldwide, the effect of reduced borrowing costs makes now the right time to invest. It added that since it takes time to immediately implement investment projects, it is time to review public investment projects that have been delayed due to the COVID-19 crisis and to plan new projects considering priorities after the COVID-19 situation.

This content was produced with the assistance of AI translation services.