HKS Affiliated Authors


February 16, 2021, Paper: "Public finances have been impacted significantly by the COVID-19 pandemic. The disbursal of large economic and health support packages, coupled with a sharp contraction in economic activity, has led to growing fiscal deficits.1 The magnitude of these deficits remains unknown because of the uncertainty regarding when the public health crisis will subside – and by extension, how frequent and severe domestic containment measures will be. However, once the crisis recedes, economic recovery is not expected to be quick and will create long-lasting fiscal pressures over the medium term. After the 2008 Global Crisis, it took an average of eight years for revenues to recover to their pre-crisis level.2 During the Ebola crisis in Guinea, Sierra Leone, and Liberia, government revenues fell by an average of three percentage points between 2013 and 2016.3 For most governments, the post-pandemic phase will necessitate a need to mobilise resources for fiscal sustainability, whilst supporting economic growth and addressing enduring challenges around inequality and productivity."