Hence, the general government should take much stronger action once we step into an unknown territory. According to the latest analysis by the International Monetary Fund, public investment is much more effective in periods of uncertainty compared to ordinary times, both as a driver of gross domestic product growth and as a catalyst for private investment.
Similarly, the rate of growth in real gross domestic expenditure changed from minus ½ per cent to positive growth of 3 per cent per annum. Greater confidence was also reflected in a substantial improvement in gross domestic fixed investment, which declined by 2½ per cent per year from 1989 to 1993, but then increased by 7 per cent per year from 1994 to 1998.