ASEAN+3 Told To Rebuild Fiscal Buffers
ASEAN+3 Macroeconomic Research Office has released its ASEAN+3 Fiscal Policy Report 2026, warning that governments in the region must strengthen fiscal management as they navigate rising global risks and structural economic challenges.
The report highlights that fiscal positions across ASEAN+3 economies have weakened, limiting policy space at a time when governments face increasing pressure to respond to external shocks while supporting long-term growth, structural transformation and social priorities. Sluggish revenue growth and rigid budget structures are further constraining fiscal flexibility.
AMRO stressed the need to rebuild fiscal buffers and safeguard sustainability through stronger frameworks, including improved risk management, efficient resource allocation, enhanced spending effectiveness and better revenue mobilization.
The report also flags growing risks from tariff escalation and volatile oil prices linked to geopolitical tensions in West Asia, urging policymakers to maintain flexible fiscal policies to cushion potential economic shocks. It calls for more robust contingency planning, transparent communication and proactive risk management to deal with heightened uncertainty.
A key focus area is comprehensive fiscal risk management, particularly addressing off-budget liabilities such as borrowings by public entities, government arrears and contingent liabilities arising from public-private partnerships, state-owned enterprises and social security obligations.
AMRO further recommends strengthening fiscal anchors and medium-term frameworks to ensure sustainable public finances, alongside improving budget efficiency through performance-based approaches and better public investment management.
On the revenue side, the report advocates durable reforms, including enhanced tax administration through digitalisation, rationalisation of tax expenditures and structural improvements to tax systems, to support long-term fiscal resilience.
