According to our surveys, firms expect a slowdown in demand over the coming months and very modest growth in investment over the year as a whole. The central projection included in the Bulletin puts GDP at 0.1 per cent in 2019 and at just under 1.0 per cent on average for the following two years.
However, bailouts would not only weaken market discipline and heighten crisis risk. Since the IMF ultimately gets paid back and investors might escape without taking a severe hit, it is the general public and particularly the poor of the debtor country that have to shoulder the full economic costs of excessive debt burdens. Reliance on bailouts is therefore also questionable on equity grounds.