From Resilience to Renewal: A Fiscal Vision For the Next Decade
IMF News, February 2, 2026
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- Published: February 2, 2026
Context and opening
- Remarks by IMF Managing Director Kristalina Georgieva at the Tenth Annual Arab Fiscal Forum, Dubai, UAE, February 2, 2026.
- Forum marks the tenth anniversary of the Arab Fiscal Forum; expanded participation includes Ministers of Finance and Central Bank Governors from multiple Arab countries.
- Core focus: strengthening fiscal institutions for macroeconomic resilience, efficient public expenditure management, and digital transformation to support diversification and recovery.
Global and regional outlook (key statistics)
- World economy projected growth: 3.3 percent this year and 3.2 percent next year.
- Inflation projections: 3.8 percent this year and 3.4 percent by 2027.
- Arab region growth: expected to rise to 3.7 percent this year.
- Fiscal target noted from IMF analysis: a tax-to-GDP ratio of at least 15 percent to support strong institutions, deeper financial markets and sustained growth.
Main risks highlighted
- Geopolitical tensions increasing 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 projected to reach unprecedented levels in the coming years.
- Fiscal strains in advanced economies could raise global borrowing costs.
- Continued long-running conflicts with risk of escalation; humanitarian needs remain immense in fragile and post-conflict countries as well as those still at war.
- Oil price volatility: prices may weaken if global demand softens amid trade tensions and geoeconomic fragmentation; unwinding of OPEC+ production cuts could exacerbate supply-demand imbalances.
Structural challenges across the region
- Oil exporters:
- Challenge of managing oil-price volatility while advancing economic diversification.
- Oil importers:
- Significant debt vulnerabilities and exposure to global financing conditions.
- Need for fiscal buffers and credible medium-term fiscal frameworks.
- Low-income and fragile economies:
- Face conflict, displacement, and food insecurity.
- Urgent need to establish macroeconomic stability and access to external financing, including international support and debt relief.
Progress over the past decade (three key areas)
- Fiscal frameworks:
- 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.
- Domestic revenue mobilization:
- GCC introduction of VAT and excise taxes, together with adoption of the global minimum corporate income tax.
- Egypt, Jordan, and Morocco have raised revenues through tax-base broadening reforms, stronger tax administrations, and greater use of digitalization.
- Expenditure reforms:
- Several countries—including Bahrain and Oman—are scaling back regressive energy subsidies, freeing resources to support vulnerable households.
Policy priorities and recommendations
- Strengthen fiscal credibility and rebuild fiscal buffers:
- Reduce vulnerability to shocks, particularly in highly indebted countries where minor changes in investor sentiment can have outsized effects.
- Fiscal consolidation will be necessary in some countries; in low-income countries, the path will require raising more revenue.
- Spend smarter to support growth:
- Make public spending more efficient and direct resources to facilitate diversification, development, and reconstruction.
- Ensure public resources are used agilely and efficiently under tight fiscal constraints.
- Renew momentum on productivity-enhancing reforms:
- Foster a stronger climate for entrepreneurship by lowering barriers to entry, ensuring fair competition, and improving the business environment.
- Promote greater openness to FDI and global expertise to unlock productivity gains from emerging technologies, including AI, accelerate digital transformation, and enhance competitiveness.
- Deepen trade integration to diversify export markets, improve connectivity, and capture opportunities from shifting global supply chains.
- Support for countries emerging from conflict:
- Prioritize careful sequencing, sustained international support, and significant resources to rebuild institutions and finance reconstruction.
- IMF engagement:
- IMF stands ready to support the region with integrated policy advice, financing, and capacity development.
- Ongoing collaboration through Fiscal Affairs Department and CD hubs—METAC in Lebanon, the CEF in Kuwait, and the regional office in Riyadh.
Source: Remarks by IMF Managing Director Kristalina Georgieva at the Tenth Annual Arab Fiscal Forum, Dubai, UAE, February 2, 2026.