Fiscal Policy in the Great Election Year

Even as the global economic outlook is stabilizing, fiscal policy continues to struggle with legacies of high debt and deficits, while facing new challenges. Public finances risks are acute this year as over 80 economies and economic areas are holding elections, amid increased support for high government spending. Financing conditions remain challenging, while spending pressures to address structural challenges are becoming more pressing. Countries should boost long-term growth with a well-designed fiscal policy mix to promote innovation more broadly, including fundamental research, and facilitate technology diffusion. Durable fiscal consolidation efforts are needed to safeguard sustainable public finances and rebuild buffers.

Press Briefing with Vitor Gaspar

Chapters in the Report

Chapter 1: Fiscal Policy in the Great Election Year

The chapter highlights heightened risks to public finances given potential distortions from a record number of elections this year in the context of elevated public debt, still-high interest rates, and slowing growth prospects. Decisive fiscal consolidation efforts are needed to safeguard sustainable finances, while protecting the most vulnerable.

Chapter 2: Expanding Frontiers: Fiscal Policies for Innovation and Technology Diffusion

Amid the recent rise in industrial policies focusing on innovation in specific sectors, the chapter presents a cost-effective mix of fiscal policies to promote innovation more broadly and facilitate technology diffusion across countries and firms.