Slash benefits to get more men into work, IMF urges

The IMF said: “Policies designed to facilitate the flow and integration of migrant workers, alongside measures to boost labour force participation among older workers in advanced economies – through retirement reforms and labour market programs – could mitigate the increasing demographic pressures on labour supply.”

Diaa Noureldin, an economist at the IMF, said migration would provide a useful boost to growth, as long as they integrate properly.

“We want to see them integrating in the societies, getting high paid jobs, their skills fully recognised, and they can participate fully in the labour market.”

While the US has successfully increased productivity over time, other countries have struggled to match this performance and need new policies to grow more quickly, the IMF said.

Slashing subsidies and cutting red tape can help, while boosting international trade can also force companies to become more competitive, the IMF said.

In a separate report, the institution warned governments against industrial strategies which include expensive, wasteful subsidies or which risk starting trade wars by blocking foreign companies from their markets.

The IMF said: “Industrial policy that steers innovation toward specific sectors such as ‘green’ (low-carbon) technologies and AI is experiencing a resurgence in many major economies amid concerns about economic and national security, often at a hefty fiscal expense.

“History shows that industrial policy is prone to policy mistakes. Even when projects transform industries, they often entail high fiscal costs and negative cross border spillovers.”

International spats can be particularly costly, the IMF said.

“Policies discriminating against foreign firms can prove particularly self-defeating, as a large share of knowledge is imported even in major advanced economies, and such policies can trigger costly retaliation,” the report said.

The EU and US have both recently objected to the scale of Chinese subsidies for manufacturers of solar panels and electric cars, which Washington and Brussels say are flooding the world with unfairly cheap goods.

Beijing in turn has hit back against what it claims are discriminatory measures against its companies.