What is fiscal transparency?

Fiscal transparency – defined as comprehensive, transparent, reliable, and timely public reporting on the state of public finances – is critical for effective fiscal management and accountability. It helps ensure that governments have an accurate picture of their finances when making economic decisions, including of the costs and benefits of policy changes and potential risks to public finances. It also provides legislatures, markets, and citizens with the information they need to hold governments accountable. Greater fiscal transparency can also help strengthen the credibility of a country’s fiscal plans and can help underpin market confidence and market perceptions of fiscal solvency. By highlighting risks to fiscal positions and the fiscal outlook, it supports a timely and smooth response to changing economic conditions, reducing the incidence and severity of crises and promoting financial and economic stability.