IMF says that austerity years for rich governments are over

The IMF has announced that rich governments are loosening their grips on the purse strings and preparing to increase spending in a move that signals the end of the austerity years.

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According to reports in its latest fiscal monitor, the most globally advanced economies saw their 2016 fiscal stance ease by as much as one-fifth of one per cent of their GDP. Initial indications are that this cautious increase was mirrored in the first quarter of 2017. It also looks set to continue as governments seek to convince electorates that better times lie ahead.

Lingering concerns

The IMF retains concerns over high levels of national indebtedness and the challenges presented by ongoing demographics that are seeing a rise in pensioners without a corresponding increase in tax-payers. Consequently, it urges governments to exercise caution when setting budgets and recommends concentrating investment in infrastructure and education.

Industry professionals

Professionals within the financial services sector will be particularly keen to ascertain the likely effects of this increased governmental spending for their clients. Regular tracking of the government’s plans is important, particularly in times of political uncertainty, as is remembering that a client’s ability to manage risks and build stronger businesses depends in no small part on the robust and rigorous back office systems of its advisers. Now may be a good time for prudent firms to examine the software that supports their services to see where improvements could be made.

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Strengthening back office systems

Financial advisers, mortgage advisers and product providers can undertake an in-house assessment of their back office systems; however, the manpower and know-how expenditure can be costly and sometimes prohibitive. There are a number of external companies, such as https://www.intelliflo.com/, that specialise in offering such services in a timely and cost-effective manner. Firms looking to strengthen their back office systems for financial advisers or other related professionals might benefit from exploring this as an option.

The future?

As recent events worldwide so neatly demonstrate, nothing in politics is ever certain. The current relaxation on spending may not persist for as long as predicted or be as wide-ranging; even so, proactive businesses within the financial services sector will want to ensure that they are set up to react as speedily as possible to every change.