fiscal policy

1. The policy of a government in controlling its own expenditures and taxation, which together make up the budget.

A function of fiscal policy, along with monetary policy, is to regulate the level of economic activity, the price level, and the balance of payments. Fiscal policy also determines the distribution of resources between the public sector and the private sector and influences the distribution of wealth.

Example Sentences

Sweden’s central government will need to increase its borrowing due to a growing budget deficit expected for both 2026 and 2027, mainly on the back of an expansionary fiscal policy, the National Debt Office said.

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Earlier this week, the International Monetary Fund said that South Korea’s economy had entered a recovery phase from the second half of 2025, partly thanks to monetary and fiscal policy.

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Ironically, the government drip-fed most of its fiscal policies to journalists in the weeks leading up to the budget.

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Gilt and sterling investors remain nervous due to uncertainty on the U.K. fiscal policy.

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Takaichi has called for “responsible proactive fiscal policy,” but it remains to be seen how her administration will balance more spending with fiscal prudence.

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