Although nearly all countries “have the potential to increase public spending efficiency,” gaps persist at 31% in advanced economies, 34% in emerging economies, and 39% in developing ones, according to a report released today by the IMF.
The IMF noted that in the face of conflicts such as the one between Russia and Ukraine, defense spending is rising, further straining already limited budgets.
The institution also argued that reallocating 1% of GDP to infrastructure or human capital could lead to a long-term growth increase of up to 3% in advanced economies and 6% in emerging ones.
In the document, the IMF also emphasized the need for reforms in areas such as pensions, healthcare, and public sector wages.
