Assessment of public finances 2020 : Attention should already be turned to the post-crisis years

Abstract

During the acute phase of the COVID-19 pandemic, fiscal policy has been deployed to support households and businesses hit by the crisis. At the same time, fiscal stimulus has been stepped up to bolster economic recovery. After the crisis, once the economy has returned to a sustainable growth path, the upward trend in the public debt-to-GDP ratio must be halted and fiscal space rebuilt. Changing the course of the public finances will require broad consensus on long-term objectives, clear short-term interim targets, and concrete measures over the coming years. With the coinciding rise in age-related expenditure, rebalancing the public finances will be difficult.