Advanced economies face “permanently weak demand” warned the International Monetary Fund (IMF) on Tuesday, which argued “the time may be right for an infrastructure push”.
According to the organization, infrastructure investment is “one of the few remaining policy levers available to support growth” – especially in the euro zone where despite accommodative monetary policy “there is still substantial economic slack, and inflation remains too low.”
“Borrowing costs are low and demand is weak in advanced economies, and there are infrastructure bottlenecks in many emerging market and developing economies,” said economists led by Abdul Abiad in the updated version of the IMF’s World Economic Outlook, out on Tuesday.
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