Investments in health and education can help further reduce global inequality, which has been in decline over the last decades, the International Monetary Fund (IMF) said Wednesday in its Fiscal Monitor report.
The IMF said it is hard to avoid levels of inequality in a market-based economic system, but added that excessive inequality can damage social cohesion; pave the way for political polarization, and lower economic growth.
'... there is no systematic adverse trade-off between increasing growth and decreasing inequality,' the report said.
Inequality in health is not narrowing in many countries, the IMF warned, adding that the ratio of the infant mortality rate in the top socioeconomic group to that in the bottom group has increased in around half of emerging markets and developing countries.
In addition, students from socioeconomically disadvantaged families perform poorer in education, compared to their peers that come from advantageous backgrounds, the IMF said.
However, 'Investments in education and health can help reduce income inequality over the medium term,' the report said.
This would help resolve poverty across generations, support social mobility, and eventually promote sustained growth, it added.
'Addressing remaining inequalities will require better targeting of public spending to disadvantaged groups to improve access to quality education and health care,' the IMF advised.
By Ovunc Kutlu in New York
Anadolu Agency
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