Fiscal Monitor

Fiscal Monitor Update, January 2021

January 2021

Government Support Is Vital as Countries Race to Vaccinate

Read full report PDF Database of fiscal policy responses to Covid-19

Flexible government actions are necessary to ensure swift and extensive vaccine rollouts, protect the most vulnerable households and otherwise viable firms, and foster a durable and inclusive recovery. This Fiscal Monitor Update analyzes measures to date and the scope for more, depending on country circumstances, and tracing the implications for fiscal debts and deficits.

The Fiscal Monitor Update at a Glance

  • Global fiscal support of $14 trillion has contributed to saving lives and livelihoods and has mitigated the effects of the pandemic on consumption and output. Together with economic contraction causing lower revenues, such support has led to a rise in public debt and deficits.
  • Global public debt is estimated to reach 98 percent of GDP at the end of 2020, compared with 84 percent for the same date based on projections in the October 2019 Fiscal Monitor.
  • Fiscal responses have been shaped by access to financing: average overall deficits as a share of GDP in 2020 are projected at –13.3 percent for advanced economies, –10.3 percent for emerging market and middle-income economies, and –5.7 percent for low-income developing countries.
  • Global cooperation on access to treatments and vaccines is essential. Fiscal support to vulnerable households and firms needs to be available as appropriate until the recovery is firmly underway.
  • Fiscal policy should support a sustainable recovery and facilitate the transformation to a green, digital, and inclusive economy while managing fiscal and financing risks.
  • Credible medium-term fiscal frameworks are needed now, especially where debt is high and financing conditions are tight or at risk.

5 Priorities for a Greener, Digital, and Inclusive Economy