IMF Says Slower Spending Cuts Could Make Room for Labor Reforms

Slowing budget cuts could buy time for countries to overhaul workforce regulations in ways that would boost their economies, according to the International Monetary Fund.

“Labor-market reforms can and often do have sizeable fiscal costs,” IMF staff wrote in a report called ’’Back to Work: How Fiscal Policy Can Help.’’ “A higher deficit or a slower pace of consolidation can absorb these, and offset the adverse short-term impact of reforms on output or employment.”