The Information .com / potential growth of emerging economies developed sy not regain pre-crisis levels for at least the next five years, warns IMF International (FMI), which warns that this lower potential make it more difficult to maintain fiscal stability.
In Chapter III of its report ‘Global Economic Prospects’ April, the international institution serves to underscore the dependence of the growth potential and the evolution of the population of working age and changes in the labor participation rate and the increase in capital.
“The potential growth in advanced economies is likely to increase slightly, but continue for below the pre-crisis rates in the medium term, “the IMF, which attributed this development to the aging population and the slow increase in capital formation as production and investment is gradually recovering from the crisis.
So, the IMF estimated that the potential of the developed economies, which had begun to decline before the crisis, growth could reach an average of 1.6% between 2015 and 2020 from 1.3 % between 2008 and 2014. “This growth is well below the 2.25% during the period 2011-2007″, adds the institution.
In the case of emerging economies, the IMF estimates that potential growth will slow to an average of 5.2% between 2015 and 2020, compared to 6.5% estimated for the period 2008-2014.
“Unlike previous crises, the global financial crisis has been associated not only with a reduced level of potential activity in advanced and emerging economies, but also with a persistent fall in the growth rate” says the Fund.
In this regard, the institution warns that these lower prospects for potential growth in the medium term compared to those recorded before the crisis “generate new challenges.”
“There are fundamental structural reforms” “In both advanced and emerging markets, lower growth potential make it harder to maintain fiscal sustainability,” says the company, which considered likely that this situation is accompanied by low real interest rates equilibrium, which in advanced economies may revisit the issue of “zero bound” if adverse shocks to growth materialize.
The IMF stresses that enhance the growth potential is a priority for all economies. So, recommends that countries advanced measures to support demand to offset the effects of prolonged weakness in demand on investment, capital growth and unemployment.
“They are fundamental structural reforms and a greater support for research and development to increase the supply and innovation, “said the IMF.
In the case of emerging economies, the institution intends to raise spending on infrastructure and undertake structural reforms aimed . to improve business conditions and product markets
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