Washington:The International Monetary Fund (IMF) has released its global fiscal report, suggesting that tax systems should be adjusted to stimulate economic growth. This recommendation was presented during the 2026 Annual Meeting of the Board of Governors of the IMF and the World Bank Group, where details of the Fiscal Monitor report were discussed by senior executives and analysts from the IMF's Fiscal Affairs division.

According to Thai News Agency, Rodrigo Valdes, Director of Fiscal Affairs at the IMF, highlighted the resilience of economic activity this year, despite a worsening of global fiscal balances by about 0.4% of GDP, similar to last year's trend. Global sovereign debt is anticipated to rise to 94% of GDP by 2025 and potentially reach 100% by 2029, driven largely by the largest economies. The strain on government finances is linked to increased spending on social welfare, defense, strategic initiatives, and rising interest burdens.

Rising interest rates are gradually impacting public debt, as countries face higher interest rates than economic growth rates, leading to an ongoing increase in interest burdens. This situation complicates debt management efforts.

The report also addresses the issue of energy prices. In response to this year's energy crisis, some countries have allowed oil and energy prices to adjust naturally, while others have implemented costly measures instead of targeted assistance to vulnerable groups. These approaches have created a significant fiscal burden, estimated at 0.5% of world GDP.

The fiscal impact of conflicts in the Middle East, along with structural changes in the government bond market, including the role of leveraged nonbank intermediaries and a decline in the safety premium of U.S. government bonds, further contribute to financial vulnerabilities.

The IMF has made several policy recommendations to address these challenges. These include improving tax systems and government spending structures to support economic growth while protecting income, implementing fiscal consolidation measures for high-debt countries with credible plans, and responding to the energy crisis with flexible measures that are specific and temporary, focusing on vulnerable groups.