Ultra-low interest rates mean wealthy countries can continue to spend, a luxury the poorest cannot afford
Go out there and spend. Don’t worry about the build up of debt. You will be making a mistake if you remove support for your economies too soon. That’s the message from Kristalina Georgieva, the managing director of the International Monetary Fund, to finance ministers as they contemplate how to deal with the economic damage caused by Covid-19.
Well, some of them at least. Finance ministers such as Rishi Sunak are certainly getting the green light to spend more. That’s the right advice and it should be heeded, not least because ultra-low interest rates mean debt servicing costs are going down even as borrowing goes up.
