The tenth Tokyo Fiscal Forum commenced with a focus on addressing fiscal challenges amidst rising global uncertainty. The event, co-hosted by Japan’s Ministry of Finance and the Asian Development Bank Institute, is supported by the Japanese government.
At last year's forum, discussions centered around revenue collection and spending efficiency amid high public debt and low growth. Since then, policy shifts and trade tensions have caused market turbulence, leading to temporary turmoil in early April. Although tensions have eased, policy uncertainty remains high.
This uncertainty, coupled with tighter financial conditions, is impacting growth prospects and increasing debt risks in countries with already high debt levels. The recently released Fiscal Monitor projects that public debt could rise by approximately 4.5 percent of GDP in the medium term due to increased uncertainty.
The current discussion emphasizes the importance of strengthening fiscal frameworks as countries face a rapidly changing environment. This is particularly crucial for nations in the Asia-Pacific region. Public debt levels in this area, excluding China, are significantly higher than they were in 2007. Managing growing spending pressures from aging populations, development needs, and natural disasters will be challenging.
Enhancing fiscal frameworks can help governments address long-standing issues and build buffers against uncertainties. For countries with high or rising debt levels, it could reduce risks without causing disruptive fiscal adjustments and improve long-term growth prospects.
Tomorrow's forum session will focus on GovTech and how digitalization can enhance government efficiency. The demand for digital products and services has accelerated rapidly in Asia and the Pacific compared to other regions. Integrating emerging technologies like AI could further improve public finance efficiency.
Panelists will share their experiences with these technologies during tomorrow's session. The IMF pledges support through collaboration with the Asian Development Bank and World Bank via the Global Public Finance Partnership to provide technical assistance tailored to regional needs.
In closing remarks, gratitude was expressed to Vitor for his leadership as Director of the Fiscal Affairs Department; this marks his final participation at the forum as he steps down from his role.