The need for effective deficit recovery strategies has become a pressing one. Increasing concerns in financial markets about debt sustainability, the potential risk to growth from high debt and budget deficits, and the need to prepare for future commitments, such as demographic changes, clean-energy/climate commitments, and required infrastructure investments, all point to the need for action. These future spending commitments make meeting current fiscal challenges more difficult and critical. Additionally, governments should focus on formulating effective deficit recovery strategies and plans for ongoing fiscal sustainability.
The report’s objective is to examine approaches and discuss options for deficit reduction, and to review strategies for ongoing fiscal sustainability. The goal is to add to the discussion as KPMG’s public sector peers evaluate their options, build their strategy, and potentially re-engineer their sector. The report draws on international data from previous experiences of fiscal adjustment, economic research, insights from KPMG partners and directors around the world, as well as interviews with senior academics and public sector leaders in the US, the UK, Germany, Canada, and Spain. It also identifies the key elements for successful and sustained deficit reduction.