Infrastructure is the basic facilities, services and systems that a country, city, or other areas, need for its society and economy to function. These include various physical structures used by many industries to produce goods and services. Infrastructure can be of two types, social, or economic infrastructure, with some amount of overlap between the two. The former include schools, hospitals etc., while in the latter constitutes of energy, water, transport, and digital communications, often considered essential ingredients in the growth of the modern economy. Infrastructure affects the economy’s output in two main ways: (i) directly through the construction sector and as investments used by the production process of other sectors; and (ii) indirectly, raising the productivity of all economic activities by reducing transportation and other transaction costs thus allowing a more efficient use of inputs. As infrastructure is an essential contributor to economic performance, policy decisions on public investments must gauge its impacts in different aspects of growth.
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