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Fiscal Roadmap to Economic Recovery


Fiscal policy can play an important role in supporting robust and equitable economic growth. The COVID-19 pandemic and its economic consequences have caused potential output in many countries to decline sharply. As such, government responses should be swift, concerted and commensurate with the severity of the public health crisis, with fiscal tools taking a key role. Restoring growth is essential in mitigating fiscal challenges ahead. The central objective of this paper is to take a closer look at the role of fiscal policy to economic growth, especially in the aftermath of the COVID-19 pandemic. The paper provides discussion on the challenges/risks and prospects of fiscal policy space, and possible reform options for the different fiscal policy instruments in navigating the recession and in adapting to the new post COVID-19 economy. The paper draws from extensive review of the literature on the topic and several analytical studies, including inputs from webinars and existing legislative proposals.


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