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ASEAN+3 nations must safeguard fiscal viability, rebuild buffers: AMRO
At the same time, growing demands on fiscal policy require governments not only to respond to immediate shocks, but also to support growth, facilitate structural transformation and reduce poverty and inequality over the medium to long term, it noted.
With fiscal positions weakened and policy space narrowed, ASEAN+3 policymakers must safeguard fiscal sustainability and rebuild buffers, the ASEAN+3 Fiscal Policy Report 2026 said.
Governments should also support growth, facilitate structural transformation and reduce poverty and inequality over the medium to long term, it noted.
Particular attention should be given to liabilities outside the budget.
ASEAN+3 comprises members of the Association of Southeast Asian Nations, along with China, South Korea and Japan.
These competing demands are compounded by sluggish revenue growth and rigid budget structures. Addressing these challenges will require stronger fiscal management frameworks, including improvements in risk management, fiscal aggregate management, strategic resource allocation, spending efficiency and revenue mobilisation.
The report also highlights the importance of comprehensive fiscal risk management, urging policymakers to strengthen the identification, assessment and disclosure of fiscal risks.
Particular attention should be given to liabilities outside the budget, including borrowing by off-budget public entities and government arrears.
Systematic monitoring and proactive management of contingent liabilities are essential, especially those related to government guarantees, public-private partnerships, state-owned enterprises and social security obligations, the report remarked.
Enhancing fiscal aggregate management, alongside improving strategic resource allocation and spending efficiency, will be critical to meeting rising expenditure demands in line with national priorities, while safeguarding fiscal sustainability and rebuilding buffers, it added.
The report further encourages policymakers to implement comprehensive and durable revenue-enhancing measures, including strengthening tax administration—particularly through digitalisation—rationalising tax expenditures and advancing structural reforms to major taxes.
Fibre2Fashion News Desk (DS)