Monday, February 6, 2017

Study: More public investment would boost economic growth – THE WORLD

updated: 10:08 PM read | write duration: 2 minutes

the Bertelsmann Foundation calls for more money for infrastructure

source: dpa/AFP/archive

the Bertelsmann Foundation calls for increased spending on roads and schools

Mehr public investment would boost economic growth in Germany, according to a study. The Federal Republic was a year of 3.3 percent of gross domestic product (GDP) in the construction and rehabilitation of roads and schools, would increase the growth of GDP to 1.6 percent, said the Bertelsmann Foundation on Monday in Gütersloh, Germany, under reference to its own calculations.

Currently, the GDP growth is at 1.4 percent, the public sector has invested between 2005 and 2014, an annual 2.2 percent of their GDP. An increase to 3.3 per cent, would correspond, according to the Foundation, the average state investment in relation to the national GDP in all member countries of the Organisation for economic co-operation and development (OECD) within the same period.

with the increase in the rate of investment could generate Germany according to the calculations, by 2025 almost 80 billion Euro more than in the case of stagnant values, in addition, would increase the public capital stock to more than 420 billion euros. Positive effects there were, in addition, also for private investment or productivity.

The increase is, therefore, also with the aim of fiscal consolidation to be compatible, because the order of 0.2 percentage points increased economy growth “long-term” positive effect on the budget balance. Public investment in a modern economy, “a key Instrument to strengthen economic growth and increase social prosperity,” summarized the authors their results.

“stay back By the low public investment in Germany is below its potential and continues to the prosperity of future generations at risk,” said the Chairman of the Board of the Bertelsmann Foundation, Aart De Geus. A sustainable state budget policy should be based not only on the debt.


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