UN Says Wealthy Countries Must Increase Public Spending

Rich countries must boost public spending and kickstart growth if the world is to avoid a damaging downturn as emerging economies slow, according to the UN’s trade and investment arm, Unctad.

In its annual trade and development report, the Geneva-based body warns that developed countries risk sliding into “secular stagnation” – a long period of lacklustre economic growth, driven by weak consumer demand.

With many emerging economies suffering crises, Unctad argues the prospects for global growth look grim unless rich countries can boost their growth rates, which could mean boosting public investment and tackling inequality by increasing wages.

“Enhancing public investment should be a key instrument for addressing secular stagnation,” Unctad said, adding that pushing up wages through an “incomes policy” should also help, by boosting workers’ productivity – something George Osborne hopes to achieve with his “national living wage”.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza