Subsidies are intended to protect consumers by keeping prices low. But they also come at a high cost.
Subsidies are expensive for governments—and therefore taxpayers—to finance and can hinder governments’ efforts to reduce budget deficits. They also compete with other priority public spending on roads, schools, and healthcare.
All consumers—both rich and poor—benefit from subsidies by paying lower prices. Governments could get more “bang for their buck” by removing or reducing subsidies and targeting the money directly to programs that help only the poor.
Read more : IMF POLICY ADVICE
IMF Calls for Global Reform of Energy Subsidies: Sees Major Gains for Economic Growth and the Environment
A new report from the International Monetary Fund (IMF) urged policymakers the world over to reform subsidies for products from coal to gasoline, arguing that this could translate into major gains both for economic growth and the environment. The comprehensive study, Energy Subsidy Reform – Lessons and Implications, released today, estimates that energy subsidies amount to a staggering $1.9 trillion worldwide—the equivalent of 2½ percent of global GDP, or 8 percent of government revenues.
No comments:
Post a Comment