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From Resilience to Renewal: A Fiscal Vision For the Next Decade
February 2, 2026
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IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: Wafa Amr
Phone: +1 202 623-7100Email: MEDIA@IMF.org
Assalamu alaikum. Thank you, Minister Al Hussaini, for your gracious hospitality. I salute the United Arab Emirates for its steadfast commitment to fostering dialogue and cooperation across the region. It is truly an honor to join you on this auspicious occasion—the tenth anniversary of the Arab Fiscal Forum!
Ten years ago, at the first Arab Fiscal Forum in Abu Dhabi, in the presence of the Director General of the Arab Monetary Fund and the Ministers of Finance of UAE, Algeria, Egypt, Mauritania, Tunisia, Qatar and Yemen, Christine Lagarde talked about the importance of strong domestic revenue mobilization and a fair, modern international tax system for the success of economies in the 21st century.
Now, ten years later, majority of the Arab countries have made tremendous progress on these topics. And the work continues — we are here today to focus on strengthening fiscal institutions for macroeconomic resilience, crucial during a time of shocks and uncertainty, and to share lessons from experience in efficient public expenditure management and the digital transformation. We are also looking forward to hearing about the priorities for the Arab world in the coming years. I am delighted by the expanded participation in the forum which we co-organize with the Arab Monetary Fund — in addition to our host, Minister Al Husaini we have the Ministers of Finance of Jordan, Libya, Lebanon, Somalia, Syria; and Central Bank Governors of Bahrain, Egypt, Libya, Mauritania, Palestine, Tunisia, the UAE and Yemen.
We gather at a pivotal moment. The world is undergoing profound shifts in geopolitics, trade policy, technology, and demographics. These shifts are converging to create enormous uncertainty. Fortunately, global growth has held up remarkably well amid these changes. But this global resilience will continue to be tested in the months and years to come.
The world economy is projected to grow 3.3 percent this year and 3.2 percent next year, supported by the agility of the private sector, accommodative financial conditions, and sustained reforms, especially in emerging markets. Inflation is expected to fall to 3.8 percent this year and 3.4 percent by 2027, helped by softer demand and lower energy prices.
The Arab region, too, has shown resilience. Growth is expected to rise to 3.7 percent this year. Oil exporters are benefiting from increased production, while oil importers are benefiting from lower prices, robust remittances, and rebounding tourism. Financial conditions have improved, and several countries have regained market access. A number of countries have made impressive strides toward diversifying their economies and investing in infrastructure to embrace the promise of AI. Several economies emerging from conflict are embarking on the difficult road to recovery.
However, daunting risks remain. Geopolitical tensions are exacerbating uncertainty, trade tensions and protectionism dent prospects for investment and growth. AI-driven productivity gains may prove overly optimistic. Large and rising debts in many countries are projected to reach unprecedented levels in the coming years. Fiscal strains, especially in advanced economies, could raise global borrowing costs. And while we see encouraging steps toward peace in some countries, we are still seeing too many long-running conflicts—and therefore a risk of escalation. In this region, humanitarian needs remain immense, in fragile and post-conflict countries as well as those still at war.
Oil price volatility is another central concern for the region. Prices may weaken if global demand softens amid trade tensions and geoeconomic fragmentation. The unwinding of OPEC+ production cuts could exacerbate supply-demand imbalances.
There is a large range of structural challenges across the region:
• Oil exporters face the challenge of managing oil-price volatility while advancing economic diversification.
• Oil importers face significant debt vulnerabilities and exposure to global financing conditions, highlighting the need for fiscal buffers and credible medium-term fiscal frameworks.
• Low-income and fragile economies face conflict, displacement, and food insecurity. The urgent need in these countries is to establish macroeconomic stability and access to external financing, including international support and debt relief.
The turbulence of recent years has taught us that resilient policy frameworks and a dynamic private sector are essential to weather shocks. Strengthening buffers will be key to the region’s ability to adapt at a time of high global uncertainty. At the same time, it’s critical that countries gradually refocus the government’s role from driving growth to creating the conditions for growth to happen. This means reducing the state’s footprint in economic activity and fostering private-sector initiative. Only the private sector can create enough jobs for the vast numbers of young people entering the region’s labor force.
Throughout its history, the Arab Fiscal Forum has supported reforms that deliver more informed, resourced, effective—and ultimately, more sustainable fiscal policies. We have seen progress on this front in three key areas:
• At the 2019 Fiscal Forum we spoke of the urgent need to improve fiscal frameworks, through greater transparency, faster reporting, and clearer, more forward-looking budgets. I’m delighted to say we’ve since seen a lot of progress. Saudi Arabia now integrates multiyear projections into its annual budgets and aligns spending ceilings with realistic forecasts. Kuwait and the UAE have enhanced fiscal transparency through improved disclosure of spending ceilings and fiscal-risk statements. Many other countries have strengthened oversight to manage fiscal risks.
• Another priority consistently highlighted at this event is domestic revenue mobilization. And it has also shown great progress. The GCC’s introduction of VAT and excise taxes, together with the adoption of the global minimum corporate income tax, is a true step forward. Egypt, Jordan, and Morocco have raised revenues through important tax-base broadening reforms, stronger tax administrations, and greater use of digitalization.
• Finally, expenditure reforms, another Fiscal Forum priority, are gaining traction. Several countries—including Bahrain and Oman—are scaling back regressive energy subsidies, freeing resources to support vulnerable households.
So where do we go from here?
We need to build on the momentum of the last decade across all aspects of fiscal policy, pushing forward with reforms that address the region’s challenges. In that spirit, today’s discussions will underline another priority: making public spending more efficient and directing resources to facilitate growth. The needs for diversification, development, and reconstruction are growing across the region. Along the way, policymakers must ensure that the use of public resources is agile and efficient, even under tight fiscal constraints.
As the IMF’s recent Fiscal Monitor reminds us, “spending smarter” is not just good fiscal management—it’s a good growth strategy.
Let me close with a few thoughts on the region’s reform agenda—and how we can make the next decade even more fruitful than the last.
First, strengthening fiscal credibility and rebuilding fiscal buffers are essential. This will reduce vulnerability to shocks, particularly in highly indebted countries where even minor changes in investor sentiment can have outsized effects.
Strong, credible fiscal frameworks can anchor expectations, bolster confidence, and reinforce resilience. With resilient growth and a favorable financing environment, there is a window to rebuild buffers and manage debt dynamics. In some countries, fiscal consolidation will be necessary.
In others, in particular low-income countries, the path to fiscal credibility will require raising more revenue. Recent IMF analysis shows that, to support strong institutions, deeper financial markets and sustained growth, countries need a tax-to-GDP ratio of at least 15 percent. A forthcoming IMF book on MENA taxation lays out policy options to raise revenues while improving efficiency and equity.
Second, we need renewed momentum on reforms that drive productivity—because without stronger growth, it will only get harder for countries to keep their finances in order.
• A stronger climate for entrepreneurship can spur innovation, create jobs, and diversify growth. This requires lower barriers to entry, fair competition and other improvements in the business environment.
• Greater openness to FDI and global expertise are key to unlocking the productivity gains offered by emerging technologies, including AI. These steps can accelerate digital transformation, enhance competitiveness, and position your economies as hubs for advanced technologies.
• Deeper trade integration can diversify export markets, improve connectivity, and capture opportunities from shifting global supply chains.
Third, supporting countries emerging from conflict must remain a priority. Their recovery will require careful sequencing, sustained international support, and significant resources to rebuild institutions and finance reconstruction.
As always, the IMF stands ready to support the region—with integrated policy advice, financing, and capacity development. We are collaborating with your teams on fiscal issues both through our Fiscal Affairs Department and our CD hubs—METAC in Lebanon, the CEF in Kuwait, and our regional office in Riyadh.
Working together, we can build on a decade of impressive progress by this forum. And we can forge ahead with confidence—through the next decade, and beyond.
