Emerging economies and established powers within the G7 are facing a growth dilemma, says economic expert Fink.
The pressing growth dilemma facing not only emerging economies, but also established powers within the G7, was highlighted recently by economic expert Fink. These countries are at a critical economic juncture, with an average debt-to-GDP ratio of 129%.
Fink pointed out that debt management methods such as taxation or spending cuts are not enough these days. The path to fiscal health and sustainable growth lies in ‘growing out of it’—a strategy that demands innovative approaches to stimulate economic expansion. “No matter how much we tax, how much we cut or reduce that debt, it will not be enough. The only way we could achieve this future of growth is by truly growing out of it”. Said Fink.
Demographic shifts expected in the next 25 years pose a significant risk to G7 countries. As the working-age population declines, so does the growth-potential, which creates a lower threshold for economic expansion and increases the need for solutions.
Fink advocates for substantial infrastructure investments, particularly through public-private partnerships. According to Fink this approach serves as a counterforce to the high-debt, low-growth trap, potentially revitalizing economies and paving the way for future prosperity.
He said “Building new infrastructure is critical, especially through public-private partnerships. Infrastructure investments are a counterforce to the high-debt, low-growth economies”.
