- Economic and Fiscal Projections: GDP growth estimates have been revised slightly upwards, with inflation projected to decline further towards targets. However, interest rates are expected to remain elevated.
- Subnational Government (SNG) Fiscal Balances: In 2023, SNG fiscal balances in the OECD have moved into negative territory not seen for a decade, with more than two-thirds of OECD countries experiencing worsened SNG fiscal balances.
- Revenue Growth Projections: SNG revenues are projected to grow by around 1% in 2024 and 2% in 2025, still below the pre-pandemic growth rates of 2% to 4% from 2015 to 2019, but may pick up to 2.5% in 2026 (in real terms).
- US and EU Fiscal Challenges: US SNG bond issuance volume is set to reach a record year in 2024 despite higher interest rates. In the European Union, a new Stability and Growth Pact with stricter fiscal oversight poses challenges to SNGs amid spending pressures.
- China’s Fiscal Management: China is addressing off-balance subnational debt, balancing between managing fiscal risks and stimulating the economy, with significant measures to strengthen debt oversight and raise the debt ceiling.
