KUALA LUMPUR: Countries in the Asia-Pacific region have sufficient fiscal space to increase their fiscal deficit and accumulate more debts to proactively respond to COVID-19’s impact, says the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
Describing the fiscal space in Asia-Pacific as “in a very good shape” as compared with other regions, ESCAP’s Macroeconomic Policy and Financing for Development Division director, Hamza Ali Malik, said the median fiscal balance as a percentage of gross domestic product (GDP) of the region stood at about one per cent, while the average debt-to-GDP ratio in the region stood slightly below 40%.
“Therefore, the countries can afford to increase the fiscal deficit when they start spending more at dealing with COVID-19 implications. And they can also issue more debts or accumulate more debts to deal with the unprecedented situation, ” he said at the virtual regional launch and press briefing on the Economic and Social Survey of Asia and the Pacific 2020 (2020 Survey) in Bangkok, yesterday. — Bernama
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