Press Briefing Transcript: Fiscal Monitor, Spring Meetings 2026

Speakers:
Rodrigo Valdés, Director, Fiscal Affairs Department, IMF
Era Dabla-Norris, Deputy Director, Fiscal Affairs Department, IMF
Davide Furceri, Division Chief, Fiscal Affairs Department, IMF

Moderator: Tatiana Mossot, Senior Communications Officer, IMF

Transcript:

MS. MOSSOT: Good morning, everyone, and good afternoon for those who are joining us online.

I am Tatiana Mossot with the IMF's Communications Department, and I will be the moderator for the April 2026 Fiscal Monitor. I am pleased to welcome our panel today with Rodrigo Valdés, Director of the IMF's Fiscal Affairs Department, Era Dabla-Norris, who is the Deputy Director of the IMF's Fiscal Affairs Department, and Davide Furceri, who is a division chief in the Fiscal Affairs Department.

Rodrigo, the floor is yours for opening remarks.

MR. VALDES: Good morning. Thank you, Tatiana, for the introduction. And thanks, all, for joining us today. Also, I wanted to thank today the Fiscal Affairs Department and COM teams for guiding me in my first Fiscal Monitor presser.

By the way, there is a picture here of the Fiscal Monitor. The other thing is that this is a tradition that Vitor Gaspar had in the department. You see the colors of ties and dresses.

More seriously, the world economy is being tested again with the consequences of the war in the Middle East. And this is a world that has less degrees of freedom, as public finances are more stretched in many, many countries.

Let me share a few remarks at the outset, first on the short run and then on the longer challenges of debt dynamics.

So understandably, there are abundant calls for fiscal support, given the pressures that households and firms are receiving from fuel and food price increases. As countries respond, both focus and intensity matter. Our central advice, protect the most vulnerable when preserving the price signals to help economies adjust. And with debt already high in many places, a fiscal response must not put public finances at risk.

Let me emphasize three points on this short-run response. First, unless things change in a big way, fiscal policy should steer clear of discretionary demand stimulus. It would make it just harder, the central bank's job in terms of inflation control. Second, and here, I want to put a couple of slides. Broad-based energy subsidies or excise reductions are not the best tool. They distort price signals, are fiscally costly, regressive, and hard to unwind. Plus, as I will illustrate in a minute, they create international spillovers. Third, when support is needed, it should be temporary and targeted to the most vulnerable, and it should be consistent with the fiscal framework and debt sustainability of countries. In many places, expenditure reallocation is the viable alternative.

Our view of what to do is summarized in this left table. And we sometimes are asked, OK, but what do you mean by targeted, temporary, et cetera. Well, we think that the support should adapt to the severity of the shock, consider alternatives to reach specific parts of the population, and recognize that energy and food shocks are different. Only if there are no viable alternatives, measures that weaken price signals should be considered, but they should not become outright price freezes.

As I mentioned just before, international spillovers from controlling prices can be large. And let me give you one simple example. If the supply of oil is completely fixed in the short run and half of the countries basically do not allow prices to move, the increase in prices at the global level will be twice as high, basically because only half of the consumption has to do all the adjustment.

Here, on the right-hand side chart of this slide, you have a bit more complicated example, where the pass-through is incomplete; only 10 percent is passed through in 50 percent of the countries. There are some assumptions about how is the supply and demand in the short run. And there is a case also for export bans. You have heard from the Managing Director, the World Bank President talking about export controls also. That also produces effects on prices. In this example, you can see that if everybody passes through, there is one effect. If there are subsidies, export bans, et cetera, the price increase could be twice as much as the original one. That's what we mean by spillovers. Domestic policies affect global prices.

The world will have very important fiscal consequences, but this should not overshadow the bigger and more persistent fiscal challenge that countries have.

And let me now move to the more medium-run perspective and make three points about this, and these are very clear in the Fiscal Monitor.

First, global dynamics remain unfavorable. And here, I want just to show you the left-hand chart, where debt continues to grow. Even though global growth was resilient in 2025, global fiscal conditions progressed very little at the world level. And it's not only 2025. The global fiscal gap-that is the difference between the primary balance that would stabilize debt ratios and the actual one. That gap worsened by 1 percentage point, if we compare the five years we're living. And for that, I mean 2024 to 2029. And we compare that with the five years pre-COVID. So, five years pre-COVID, we had a certain situation. The situation of the five years we're living now is worse. This shift is explained in the middle chart. And perhaps here, the most important thing is that this is not just a cyclical problem. It basically reflects policy choices, permanently higher spending, and lower revenues.

On top of this, the world faces higher interest rates than in the past. If you compare this period of these five years with these five years pre-COVID, real interest rates are about 0.6 percent higher today, what countries are actually paying. As a result, public debt is projected to keep rising. In our WEO reference forecast, global debt reaches 99 percent by 2028 and this 100 percent mark before that - before that we had in the previous editions.

The second point I wanted to make is that risks are significant. Global debt-at-risk-that is a very technical way to look at debt, that we define as the 95th percentile of projected debt distributions. So, we are here thinking of not a point forecast but a distributional forecast. If we look at that, we see that at the 95th percentile, debt could reach 121 percent in three years' time, as you see in the red line there in the severe scenario of the WEO. So, the black line is our reference scenario. That reference scenario has uncertainty. So, the blue lines in the right-hand chart show the 50 percent, 75th percentile, and 95th percentile scenarios, basically. With the severe scenario of the WEO, this makes things tilted up and makes things worse. Importantly, this is not only the war that is behind these scenarios. There are other risks behind-fragmentation, political instability, a potential large market repricing, for example, in AI stocks.

Finally, in terms of risks. As central banks unwind QE and governments rely on more private investors, these private investors are more sensitive to market sentiment, and that makes movements in yields more volatile. Similarly, the duration of debt in the world has been shrinking, OK? And that implies that debt dynamics are more sensitive to short-run conditions.

Let me finalize with a third point on this medium-term perspective, that is our advice. And this is very simple. Rebuild fiscal buffers once conditions stabilize and do so without delay. Crises, of course, require emergency support, and people focus on the crisis. But the ability to respond really depends on pre-existing fiscal space. And too often, the needed consolidation is postponed. Debt only ratchets up, squeezing the fiscal space for the next crisis. Countries need tangible progress, anchoring credible medium-term fiscal frameworks and clear communication. The longer the delay, the steeper the effort will be in the future and the higher the possibility of not having an orderly fiscal consolidation.

Finally, in low-income developing economies, our priority is to strengthen domestic revenue mobilization to protect social and development spending and also because we have to recognize that external aid is declining.

With that, let me go back to you, Tatiana.

MS. MOSSOT: Thank you, Rodrigo.

So, before we take your questions, just a quick word on ground rules. So please raise your hand, introduce yourself and your media very quickly, and then we will get to you. We will start with global issues around the Fiscal Monitor, then regional. For any program-related country-specific questions, please refer to the regional press briefings, which are going to start tomorrow.

And with that, we will start with the person in yellow, please. Fourth row.

QUESTIONER: Thank you so much. This is obviously a big theme throughout these meetings so far. We have heard this kind of mantra continuously from the World Bank- I'm so sorry.

We've heard this mantra throughout from both the heads of the IMF and the World Bank and other people and now from you, about the need to have these measures be targeted. But obviously, the circumstances are so great. I mean, is there any possibility here of coming up with something that would be - not a case-by-case thing but a sort of-you know, a reprieve. Is there a discussion-should there be a discussion about limiting-deferring debt payments because they are so high, just to give people a headstart on this? Or is this crisis-does it rise yet to the level of what happened during COVID? Thank you.

MS. MOSSOT: Rodrigo.

MR. VALDES: OK. Let me answer the question, the person in yellow.

So, look, we have to differentiate very well the shock that we're living through and previous shocks. And this is a bit technical, but the difference is when demand is healthy or supply is healthy. If you try to undo a supply shock by trying to prop up demand, you will end up with more inflation. So we have to recognize that this is not COVID, not only because of the severity-which is very different-but also the configuration is different. That doesn't mean that this can morph into a different scenario. If we have the severe case that is in the WEO and financial markets react, that could happen. But for now, this is, as Pierre-Olivier said, a very much a textbook case of a supply-side shock. And in that case, a strong fiscal reaction will produce more problems than benefits. Therefore, the need for big reactions is not there. That doesn't mean that-

Everybody should care about the most vulnerable. Families are feeling this. But there are ways to do this that do not produce fiscal problems because the scale is very different from what we were used to, for example, in COVID. Let me stop there.

MS. MOSSOT: Era.

MS. DABLA-NORRIS: Let me just add to that. I think it's important to recognize that the starting point today is very different from COVID. Countries have much less fiscal space, room for maneuver. Debt levels are high in many parts of the world. And there are other imperatives on budgets, as well. So figuring things out within a tighter budget envelope is important. And this is why our message has been pretty clear, that it's really important to protect people-which is vulnerable people, in particular-and not prices.

MS. MOSSOT: Thank you. We will move to this side of the room, and then I will come back here. The person in the first row.

QUESTIONER: You said that broad-based price subsidies should be avoided. For energy importers, why it's considered a better option to let the oil prices free? How political authorities could be sure that higher inflation will not impose the greatest costs? I don't mean politically. That's clear. I mean economic and fiscal costs.

MS. MOSSOT: Another global issue. I will go there and come back. Sir?

QUESTIONER: You have talked about the importance of rebuilding fiscal buffers once the situation has stabilized. Have you given any thought to two particular things, given that we've been dealing with an energy shock; one is that you should do this through increasing carbon taxation, that would accelerate the switch to renewables; and secondly, have you given any thought to the use of windfall taxes on oil and gas profits?

MS. MOSSOT: OK. Thank you. And another one here, the lady in the first row. And I will let you ask those questions.

QUESTIONER: You talked about the fact that the subsidies hurt, definitely. But judging from the preliminary data on the measures to combat the fuel price shock, do you have any preliminary data about the winners? You mentioned the targeted help for the vulnerable, but maybe you can give some more data about who is the winner in these policy dilemmas.

MR. VALDES: Sure. Let me start with a few things, and I will ask Era also to jump into this.

Let me start from the inflation question. That's something rash for the world economy. We cannot, with that policy, produce more oil. So although it could make sense from the perspective of a small country, if everybody does that, we're in big trouble. So that's why I think it's very important to reflect scarcities through prices, because we need to adjust to the reality.

What are countries doing? And Era will give you more on this. But let me give you one piece of information. We have two efforts here, a tracking of policies and a monitor of prices.

Let me just refer to the monitor of prices. Here, if you take the biggest economies-so about 17 economies in the world-it's interesting to see that five have basically had zero pass-through; seven have had significant pass-through; and five are intermediate. So the experience is very heterogenous across countries.

If you look at the regions now and not the bigger economies, in order, I consider in the Middle East, there is less pass-through. Then in sub-Saharan Africa, there is a second one. In Europe, European emerging markets, the pass-through is the biggest. All countries, almost all countries are passing through. So, again, the experience is very heterogenous. And what is very clear is that exporters of oil tend to contain more prices than importers of oil.

Before going to Era, one issue about transition, energy security, the aspects that are very important. Let me make two points here.

One is that there are many tools to help accelerate this transition. You mentioned carbon taxes. There are others, too. This shock will produce incentives to do it. So that doesn't need to be a restriction for fiscal. Now, I would say that this-that the demands do not-are such that these tools will solve the fiscal. OK? The fiscal problem is sufficiently high, that it's not only one tool that will solve it. We really, really need to look at more revenue and also, for sure, containing expenditures.

A final point on the energy issue is that-although it's very important, during a period where, as the one we're living through; that is basically scarcity-we should not confound security with hoarding. Hoarding in this moment is not good for global prices. And that is also something that our authorities of the Bank and the Fund already mentioned. Thank you.

MS. DABLA-NORRIS: Maybe just very quickly, to add to what Rodrigo was saying.

So, we're actually tracking what countries are doing around the world, and we're doing this in a very comprehensive way. We're looking at the types of measures that countries have put in place. And what we see is that countries are really adopting a wide range of measures. Some are adopting revenue-based measures, so cuts in VAT or excises. Others are doing spending-based measures, yet others are doing pricing measures.

While it's too early to determine what the fiscal costs of these measures are, what is becoming clear is that the response so far has been much more restrained than, say, the 2022 shock, the energy price shock. And part of it is because it's not entirely clear. There's a lot of uncertainty as to how long the situation will last, so countries are not necessarily coming out in full force with huge packages.

That said, we have some important lessons that we learned from the 2022 energy shock and other shocks similar to that. And that is that while these broader energy subsidies and price caps can cushion households-this is not to say that they don't work. They do work. The fiscal costs associated with them can be extremely high. So in an environment, as we mentioned, where fiscal space is much more constrained and governments are facing many different trade-offs-not just in the near-term but also over the medium term-choosing sort of a more disciplined way of cushioning the impact is what we're advocating.

MS. MOSSOT: Another set of questions. So I will go here, and then we will go with the person there, and we will go back there. Thank you.

QUESTIONER: Tell me, at what point does a prolonged closure of the Strait of Hormuz stop being a temporary external shock and would require some structural fiscal adjustments, rather than targeted measures?

QUESTIONER: You talk about the need to rebuild fiscal buffers once conditions stabilize and to do so without delay. Many countries - the electorate, there's no political will for belt-tightening, and social discontent is high. How are y'all thinking about that? And how are you advising member countries?

MS. MOSSOT: Thank you. And this side. The person there, please.

QUESTIONER: Does the IMF's Spring Meeting 2026 Fiscal Monitor sufficiently reflect the urgent energy created by recent cases of fiscal misreporting and concealing the liabilities in several African countries? And how confident can policymakers be that its recommended fiscal frameworks generally bolster economic sovereignty, rather than deepen external dependency in environments where data integrity itself is in question? Thank you.

MS. MOSSOT: Thank you.

MR. VALDES: OK. So let me start with the last question, and then I will pass to my colleagues the others.

And let me say that-in terms of misreporting, let me say we commend the Senegalese for their commitment to transparency and for disclosing this unreported public debt that happened before.

In terms of the Fiscal Monitor, I can say that we always use the best information that we have available, and that is a practice at the Fund level.

And in terms of misreporting more broadly, as you know, we are conducting an internal review. We have to go to the Board with some of the conclusions at some point. But it's very important that we are already working on some aspects. We are revising the data integrity frameworks that we have. We are strengthening our review, internal process. And Fiscal Affairs has a very important role there. We have experts on this. And also enhancing the internal training to staff to better identify misreporting cases. There are techniques within our review process, where we can check consistency, and that has to be deployed to the full extent to try to minimize these cases.

Now, misreporting have existed for a long, long time in different cases. Sometimes it's just capacity in terms of countries. So-but we need to minimize them, of course. Thank you.

MS. DABLA-NORRIS: Maybe just very quickly, on the political economy I will turn it over to my colleague Davide.

Our research also shows that political discourse has become more expansionary around the world, not just in advanced economies. And sort of-and the calls for restraint or fiscal restraint have actually declined over time. And this is true for political parties of all stripes, across all types of countries.

Now, that said, we also have shown in previous Monitors that countries have undertaken complex, difficult, challenging reforms in different contexts. So, what matters? Transparency, the ability to spend smarter, something that we've highlighted time and time again. So, spending efficiency, improving the efficiency of the way-the manner in which you tax, communicating trade-offs to the public in a very clear way so that people-everyone's onboard. And in the process of reform, ensuring that you protect the most vulnerable, who often lose from these reforms. So, there is no magic bullet, if you will, but there are lessons that we've learned from previous experiences of reforms.

MR. FURCERI: Yes. Let me add one aspect of reform that is quite relevant right now.

Many countries, as Rodrigo has mentioned, they have in place large subsidies. So, these subsidies, you know, are regressive, fiscal costly, and they are distortive.

What our research has shown in the past Fiscal Monitor is that countries can successfully manage to move from generalized subsidies to more targeted transfers. And this basically has impeded on three sort of arrows. The first arrow is clear communication and strategy, engage with the relevant stakeholders to make sure to get buy-in for the various reforms, what are the trade-offs.

The second was accompanying reforms, especially on governance. Policies that tend to foster trust toward the government to make sure that any windfall in revenue is spent on things that matter for the societies for development.

And third is the design of the reform in terms of timing but also in terms of the graduality of the reform.

MS. MOSSOT: Thank you. We will go online, as we have some questions. I think we have Doha from Egypt and I think [Gianluca] from Il Sole. Can you hear us, Doha?

MS. MOSSOT: Please go ahead with your question.

QUESTIONER: Thank you so much for taking my questions. Actually, I have two questions.

My first question is on the ongoing war in the Middle East. To what extent this ongoing conflict and the related escalation could reshape the spending planned for the region?

My second question is specifically on Egypt. Could you, Rodrigo, please, first on the projections for the country's debt, current account deficits, and give us a snapshot on these projections? And also, to what extent Egypt could maintain its fiscal consolidation plan amid the repercussions of the ongoing war? Thank you so much.

MR. FURCERI: Let me give you a quick overview regarding the MENA region.

We currently have public debt that is projected to increase, to reach about 54 percent of GDP by the end of our forecast horizon, which is a level that has been higher than pre-COVID. Now, the fiscal impact is likely to be very heterogenous, both between oil exporters or importers but also within oil exporters.

For oil exporters, the fiscal drag will ultimately depend on two factors. One is the price. The increasing price, of course, is going to help the fiscal buffers; but on the other side, we have a cut in production in exports that is going to dampen the fiscal revenue. So the net effect will really depend on the strands of these two channels. We have some countries, such as Oman, for which we have increasing fiscal space, and a country such as Iran, for which it will decline.

For oil importers, typically, the effects are negative, stemming from lower demand coming from consumption, coming from lower activities. But also, as Rodrigo mentioned, if you look on the spending side, typically, the pass-through in this region has been relatively small, because many of these countries exhaust subsidies, so this is going to add to the fiscal cost.

MS. DABLA-NORRIS: Maybe just very quickly, on Egypt. So just to say that in Egypt, as you know, public debt remains elevated, so around high 80s as a percent of GDP. And financing needs are-they remain large, although debt is projected to decline over the medium term. So given this high level of debt, maintaining fiscal discipline becomes very important.

And the higher energy prices do add to fiscal pressures. As an energy importer, Egypt is now facing higher fuel and import costs and tighter global financial conditions. And this increases risks, debt risks in a high debt environment. But so far, the economic impact of the war has been contained, and it's been supported by the decisive and coordinated action that the government has taken. But that said, I think the bottom line still is that sustained fiscal reforms remain critical, given high levels of indebtedness. And stronger debt management, reducing the footprint of the state, mobilizing revenues in an efficient way, all of those recommendations continue to hold.

MS. MOSSOT: Thank you. So we will stay with regional questions. In the first row here.

QUESTIONER: A question to Mr. Valdés. It's about the U.S. debt. According to the IMF projections, the U.S. debt will exceed 142 by 2031. This year, over 125 percent of GDP. So does the IMF believe that the U.S. economy in terms of debt, of course, is too big to fail or the debt distress is inevitable if the U.S. government just continues to, you know, kick the can down the road and there's no clear path for debt consolidation? Thanks.

MS. MOSSOT: Do we have other U.S. questions, please?

QUESTIONER: Chiefly, with the role of treasures, there seems to be a move away from treasuries as a go-to safe haven asset. And I think you mentioned in your report how there's a disappearance of the premium treasuries used to command. So I am wondering what that disappearance means for the cost of capital, for corporations, and even other markets, including emerging markets that use it for-rely on treasuries for external financing. Thank you.

MS. MOSSOT: Last U.S. question?

QUESTIONER: You have talked about the danger of countries engaging in export controls and subsidizing oil consumption in terms of the spillover effect. Have you done any analysis of what it would mean if the United States adopted those policies?

MS. MOSSOT: Thank you. Rodrigo?

MR. VALDES: OK. So, on the U.S., in general, first. The deficit in the U.S. dropped from close to 8 percent last year, general government calendar year, the translation between fiscal, central government, federal government, and fiscal year is not trivial. But let's talk with numbers comparable to the rest of the world, that is calendar year and general government. And the deficit moved from almost eight to slightly below seven. So, it was a good year in terms of some consolidation, explained quite a bit by tariffs. But our forecast is that this deficit goes back to around 7.5 percent and stays there for the near future. That means that the dynamics of debt continue to go up, as you mentioned before.

What we have said is that the U.S. needs a credible-and I would add a robust consolidation plan to put the ratio of debt to GDP in a downward path. That means that the adjustment should be around 4 percentage points of GDP, which is not minor, of course.

How to do that? This was extensively discussed in the Article IV. The Article IV with the U.S. happened just a few weeks back. So, you can refer to that. But there are many things, both in spending and revenues.

It's important that markets today give the U.S. space. But the fact that the duration of debt is lower, that we have these holders of debt that I would say are less firm. This cannot wait forever. There's time, but we cannot wait forever. And Congress has to accompany the government in this effort.

In terms of this premium that exists in the U.S. debt market, that premium was tested these days. And it's very interesting that against emerging markets, the premium remained. OK? With the other advanced, big advanced economies, however, the U.S. behaved more similarly. So, these are signs that markets are, I would say, not as forgiving as they were in the past. No? But, again, there is time because markets are behaving well. At the same time, the more time passes, the more pressure you could have down the road, so it's very important to deliver on this.

MS. MOSSOT: We have less than 10 minutes to go. I will go back to the first, the person in the first row here. And then we will come back here to the center, and we will end there, too.

QUESTIONER: Thank you very much for taking my question. My question is two questions.

First, on Africa. How vulnerable is Africa fiscally speaking, bearing in mind that a majority or some of the countries have elevated debt, as well as there are oil-producing countries like Nigeria and Angola.

The second question is on Nigeria. Nigeria, at least in the last two or three years, has undertaken reforms. Do you think that the external pressures we're seeing now, how resilient would those reforms be? The Middle East crisis, how much of a test would it be for those reforms? Thank you.

MS. MOSSOT: Thank you very much. We will move quickly here, on the first row with the person here.

QUESTIONER: The Fiscal Monitor report also speaks about India's GDP, debt-to-GDP ratio, currently elevated at 84 percent, as per the latest. If the country continues to cushion its consumers, how will it manage fiscal management and also protect its consumers?

MS. MOSSOT: Thank you. Here, in the first row, and then we will go there.

QUESTIONER: I want to follow up on your remark about energy transition. You talk about that we also need to contain fiscal spending and try to increase revenue. But for some countries, if you want to transition toward more renewable energy, they might need more up-front fiscal spending and investment, which could be challenging. And I was wondering, how do you view that balancing act in their fiscal policy, like the short-term costs and the long-term benefits? Thank you.

MS. MOSSOT: Thank you. And the person there, to close.

QUESTIONER: I see from the projections at the back of the Fiscal Monitor that you have the U.K. tax burden rising by more over the forecast period than almost any other country in the world. Do you think that there is some danger? And obviously, that is one path to rebuilding fiscal buffers. But do you think there is a danger of that undermining growth in the U.K.? And can more be done on the spending side of the ledger, particularly sort of out-of-control welfare spending?

And you also mentioned the premium that the U.S. now has to pay for borrowing. That's also the case in the U.K. So perhaps you could comment on some of the reasons for that.

MS. MOSSOT: Thank you. So, Era, Rodrigo, and Davide, you have less than six minutes.

MR. FURCERI: Let me start with Africa. So many low-income countries, including in Africa, are probably those that are more affected by the current shock. Why this is the case? Because we have seen not only energy prices going up. We have seen fertilizer prices going up. We are seeing increasing shipping costs. And this is increasing different types of prices, so they are going to reduce output production but also consumption. And in some countries that are more vulnerable, there is the risk that this is going to affect poverty and food security. So the fiscal pressures stemming from all these costs are likely to be relevant. However, again, there is a differentiation between oil-exporting countries, such as, for example, the Nigeria or other countries for which the oil price is going to generate some windfall. In those cases, it's important that these countries use this windfall in revenue to clear its arrears, help build the fiscal buffers, and reduce interest payments.

In the case of Nigeria, as well as other countries that have implemented the subsidy reform implies that the fiscal cost from the increase in energy prices is going to be lower. However, for many countries, there is still a need to build buffers; and in many countries, revenue mobilization is a priority, given that interest rates to revenue stay quite high, about 15 percent for many low-income countries.

MS. MOSSOT: Thank you. Next question is for Rodrigo.

MR. VALDES: Let me go to the question on energy transition, India and the U.K.

On India first. First, strong growth makes life much easier. It can't be much in a better position if they were growing as India is growing. And India's not a cyclical phenomenon. Its trend growth is much higher.

Second thing, we think that the fiscal targets are within reach. However, there are some risks from the subsidies to fertilizers and fuel prices. And as in other countries, we would recommend to try to find space to reallocate. Importantly, in the medium run, India should sustain the efforts to lower its debt-to-GDP ratio to open space for other emergency spending.

In terms of the U.K., let me just say two things. One is that it depends a lot of what you do with the money you collect for the growth impact of revenues. And the assessment of the U.K. team-although this will continue in the next few weeks because the Article IV is starting, so we should not preempt that discussion. However, what I can say is that the team assesses that the combination of the package is good because it's doing-it's dealing with the fiscal but a good part of the spending is also helping growth.

On debt and yields, well, we're living in a period where yields are becoming more sensitive to debt. And that is a bit of a canary in the mine. No? That is telling you, look, we're getting closer to where things may need to be rushed in terms of adjustment.

On energy transition, I just want to say that this event that we're living through is a short-run problem that will not be solved by policies that take time. OK? So we should not confuse the two discussions. But the energy transition and energy security are important. They have this fiscal aspect in certain cases. However, as I mentioned before, you can charge-let me give you two examples. You can charge for security; and also, you can charge for the externalities that many of the fossil fuels produce. There is, every two years, a report by FAD trying to put numbers on this. And the numbers are very large. So I think there is no reason to think that there's a contradiction between fiscal rectitude and transition.

MS. MOSSOT: Thank you. We had one last online, very quickly. Could rapid adoption of AI improve fiscal outcomes with inequalities and budget pressures? Era, very quickly.

MS. DABLA-NORRIS: Let me just say that AI presents major opportunities for governments. It can raise productivity, improve the way governments do their business-so think more efficient tax administrations, better service delivery, better use of data for improved health, education, social protection systems. So that's the good side of things. It can be used to fundamentally reshape the way governments do their business. But at the same time, I think it's important to recognize that there are risks. It can reshape jobs, and this is a risk. It can concentrate returns, wealth. It can increase inequality. And social protection systems may come under pressure as people-as jobs are impacted.

So, I think the fundamental question that governments need to ask is: Are our current tax systems, are our current social protection systems fit for purpose? Because there's a lot of uncertainty in the way AI will play out. What impact would-what actual impact it will have on labor markets, what actual impact it will have on inequality. So, the challenge for a government is really to see whether their systems are adaptable and that they can meet the risks that it portends.

MS. MOSSOT: Thank you very much, Era.

Thank you, Rodrigo, Era, and Davide. Thank you all for joining us. The full report, charts, and background materials are available on imf.org, and the communications team remains available, of course, for any follow-up questions.

Please stay tuned or please stay already in this room, as the press briefing with the IMF's Managing Director, Ms. Kristalina Georgieva, will start very soon. Thank you very much.