Managing Fiscal Risks for More Resilient Public Finances

Fiscal shocks can quickly turn today’s uncertainty into tomorrow’s deficits and debt. Governments that analyze, disclose, and manage fiscal risks before they materialize are better prepared to protect public finances.

The Joint Vienna Institute (JVI) hosted the course Managing Fiscal Risks: A Hands-on Approach from April 27 to May 1, 2026. Delivered by the IMF’s Fiscal Affairs Department (FAD), the course brought together 28 participants from 18 countries across the JVI region including seven European Union member states, selected from a high total of 173 officials who applied. 

Countries in the JVI region have faced repeated fiscal shocks in recent years, including the COVID-19 pandemic, the economic effects of Russia’s war in Ukraine, energy price volatility, trade disruptions, the war in the Middle East, and heightened global uncertainty. These shocks have interacted with existing vulnerabilities, including elevated public debt and limited fiscal space.

The program focused on five core areas: institutional arrangements for fiscal risk management; macroeconomic risks; fiscal risks from state-owned enterprises; the integration of fiscal risks into budget processes and policy decisions; and fiscal risk disclosure. The structure helped participants move from identifying and analyzing risks to considering how governments can mitigate them, reflect them in fiscal policy, and communicate them transparently.

The course combined lectures, country presentations, hands-on exercises, and group work. Participants from Albania, Austria, Bulgaria, Kazakhstan, Kosovo, Lithuania, the Slovak Republic, Türkiye, and Ukraine prepared country presentations before the course and shared experiences linked to the five course topics. Presentations on Spain’s fiscal council and the UK Treasury’s fiscal risk management framework complemented these country cases with international good-practice examples.

The presentations showed that fiscal risks differ across countries but often raise similar policy challenges. Participants discussed risks from state-owned enterprises, energy sector exposures, guarantees, arrears, public banks, aging-related spending pressures, and wartime fiscal pressures. The course also introduced several tools in the FAD’s fiscal risk toolkit, including the Fiscal Risk Assessment Tool, the SOE Health Check Tool, the SOE Stress Test Tool, and the Debt Guarantees and Loan Assessment Tool. 

Group exercises covered macroeconomic forecast errors, the integration of fiscal risks into budget decisions, and the preparation of fiscal risk statements. Several exercises used role play: groups presented their analysis and recommendations to “ministers of finance” and “ministers of economy,” played by other participants. Participants quickly adopted the perspectives of their assigned roles, leading to realistic policy debates on the trade-offs governments face when designing fiscal policies under uncertainty. 

The discussions reinforced that fiscal risk management is not only a technical exercise. Better risk analysis needs to feed into budget preparation, fiscal policy decisions, and public reporting. Participants emphasized that many countries have made progress, including through stronger fiscal risk statements and better institutional arrangements, but that further reforms are needed to embed risk analysis more systematically in decision-making.

The course connected directly with FAD’s ongoing technical assistance work in many countries represented in the room. Country presentations showcased progress already achieved, often with IMF support, while also pointing to areas for further reform. The discussions helped create momentum for follow-up capacity development: shortly after the course, FAD fielded fiscal risk management-related technical assistance missions to several countries in the JVI region, including Albania, Kosovo, Montenegro, Serbia, and Slovakia.

The course was funded by the European Commission and the Swiss State Secretariat of Economic Affairs-funded Fiscal Reforms in Southeast Europe program and the Debt Management Facility, which also support several of the country-specific technical assistance engagements.

Fritz Florian Bachmair, Senior Economist, IMF