Collecting More and Spending Better

IMF News, June 5, 2024

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Event: Opening Remarks by Deputy Managing Director Kenji Okamura at the Ninth Tokyo Fiscal Forum, June 5, 2024.
Key constraints facing policymakers:
- Global public debt remains high—around 9 percentage points above pre-pandemic levels as of end-2023.
- Medium-term growth projections are the weakest in decades—just above 3 percent.
- Even with inflation coming down, interest rates could remain higher for longer.
Consequences:
- These challenges constrain government budgets while public spending demands rise, including to address climate change and aging populations.
- Mobilizing revenue and spending more efficiently are essential to rebuild fiscal buffers, prepare for future shocks, and deliver sustainable development.

IMF research finding:
- With better tax design—including more fair and inclusive taxation—and stronger public institutions, emerging and developing economies can improve their tax-to-GDP ratios by up to 9 percentage points on average.
Focus of the conference:
- Strengthening tax capacity through effective policies and well-functioning revenue administrations.
Policy implications implied in the remarks:
- Prioritize tax design that is fair and inclusive.
- Invest in strengthening public institutions and revenue administrations to mobilize domestic resources.

Timing and policy stance:
- With inflation falling, it is time for policymakers to pivot toward fiscal consolidation.
- The pace of tightening will vary across countries but should broadly strike a balance between fiscal risks and the strength of private demand.
Essential elements for sound policy:
- Medium-term plans.
- Credible fiscal frameworks.

Instruments and initiatives noted:
- Domestic Resource Mobilization Initiative (with the World Bank) to help members increase resources, spend more effectively, and build domestic capital markets.
- Global Public Finance Partnership, or GPFP, to provide a one-stop-shop for capacity development on both revenue and spending.
Cross-cutting integration in GPFP:
- Climate change, gender, inclusion, and digitalization to help countries prepare for transformations ahead.
Convening role:
- Fora like the Tokyo Fiscal Forum are used to share experiences, insights, and best practices for strong fiscal policy.
Operational message:
- The IMF offers support to help countries turn ideas into policy and put policy into action.

Core prescription: Working together to collect more and spend better to build growth, jobs, and prosperity.
Tone: Collaborative and action-oriented—IMF stands ready to support members’ fiscal strengthening.

Opening Remarks by Deputy Managing Director Kenji Okamura at the Ninth Tokyo Fiscal Forum, June 5, 2024.