Collecting More and Spending Better

June 5, 2024

Good morning and welcome to the Ninth Tokyo Fiscal Forum.

I would like to thank Japan’s Ministry of Finance and the Asian Development Bank Institute for co-hosting this event.

The focus of this year’s forum—“Collecting More and Spending Better”—is especially timely.

Why? Because policymakers are in a challenging fiscal environment.

Global public debt remains high—around 9 percentage points above pre-pandemic levels as of end-2023.

At the same time, medium-term growth projections are the weakest in decades—just above 3 percent.

And even with inflation coming down, interest rates could remain higher for longer.

These challenges constrain government budgets, even as public spending demands rise—including to address climate change and aging populations.

In this context, mobilizing revenue and spending more efficiently are essential to rebuild fiscal buffers, prepare for future shocks, and deliver sustainable development.

To be most effective, these two pieces must go hand-in-hand.

Today, the conference will focus on the first piece—collecting more revenue.

Our research shows that 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.

So our panel today will discuss how countries can strengthen their tax capacity, including through effective policies and well-functioning revenue administrations.

Tomorrow, our focus will be on the second piece—better spending.

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. At the same time, medium-term plans and credible fiscal frameworks are essential elements to achieve sound policy.

As countries strengthen their public finances, the IMF is here to support you.

Together with the World Bank, we have started the Domestic Resource Mobilization Initiative to help our members increase their resources, spend more effectively, and build domestic capital markets.

Through our new Global Public Finance Partnership, or GPFP, we will provide a one-stop-shop for capacity development on both revenue and spending.

The GPFP also integrates cross-cutting issues—including climate change, gender, inclusion, and digitalization—to help countries prepare for the transformations ahead.

And through fora like this, we are convening our members to share their experiences, insights, and best practices for strong fiscal policy.

As you gather over the next couple of days to discuss these important and interrelated fiscal issues, please remember the IMF is here to help you turn ideas into policy and put policy into action.

Working together to collect more and spend better, we can build the growth, jobs, and prosperity our citizens deserve.

Thank you.