Economists recommend a spending target of 3% of Guernsey's GDP in the medium to long term, to support economic growth.
Policy and Resources sought advice from the three economists who comprise Guernsey's Fiscal Policy Panel.
Their report shows that Guernsey is a low tax island that spends less on big government projects than comparable places.
The 2025 Fiscal Policy Panel report recommends that 3% of wealth, or GDP, is spent on building infrastructure, which in turn is a wealth creator.
The current target is 2% of GDP but the panel say this is not consistently met.
Investment in infrastructure is part of achieving something known as 'fiscal balance' which is where the money that Guernsey earns, its spending and reserves are in sync.
The report says spending up to 3% on capital projects will create economic wealth and stability. It says big projects, like, for example, the construction of The Guernsey Institute and the hospital modernisation programme, will act as economic generators for the future.
Tax reform - and deputies have supported GST being introduced in 2027 - is seen as essential to shore up infrastructure funding.
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