Emerging economies in Asia like the Philippines should continue to strengthen their fiscal response to ensure economic recovery as the pandemic’s end is nowhere in sight.
In the latest Asian Development Bank blog, ADB principal economist Jong Woo Kang expressed concern that emerging countries are not spending enough to shore up their economies despite suffering from the impact of the pandemic.
Kang said this is evident with advanced economies recording large increases in fiscal deficits in 2020 while developing countries’ fiscal responses have been much more constrained.
He added, “Asian economies need to look… for ways to wisely use debt financing opportunities while safeguarding their economies from the risks of runaway debt.”
He noted, “Now is not the time to withdraw proactive fiscal expansions. Many countries have to continue to strengthen fiscal responses and beyond, to bounce back from the economic downfall.”