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Could infrastructure be the panacea for global growth?

In its April 2016 World Economic Outlook, the IMF published its latest estimates of the so-called ‘output gap’ – these provide an indication of the amount of spare capacity in an economy by estimating how close it is to operating at its potential level of output. Output gaps are notoriously hard to estimate precisely, and are sometimes subject to large revisions, but they can provide some insights into whether policy should be focusing on boosting growth or reining in potential future inflationary pressures.

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