In emerging market and middle-income economies,debt ratios and deficits remain generally moderate,although, on average, above pre crisis levels.
Prospects of tighter financing conditions and possibly lower potential growth, coupled with rising contingent liabilities, call for rebuilding the policy room for maneuver that was used during the last few years; and for strengthening the fiscal frameworks to manage risks from government activities not currently covered by budgets.
Countries facing difficult financing conditions would benefit from taking early fiscal action.