AssetID: 55606994
Headline: UNCAPTIONED: OECD Urges Governments to Roll Back Fuel Tax Cuts to Avoid Inflation and Fiscal Strain
Caption: OECD Urges Governments to Roll Back Fuel Tax Cuts to Avoid Inflation and Fiscal Strain. Governments that rapidly cut fuel taxes in response to the Iran war are now required to reverse course, as concerns grow over the long-term cost of such measures. Organisation for Economic Co-operation and Development (OECD) chief economist Stefano Scarpetta has told the Financial Times that universal energy subsidies are too expensive to sustain. More than 25 countries, including EU members and major emerging economies like Brazil and India, have implemented fuel tax cuts to cushion households from surging energy prices. However, Scarpetta argued that these measures place significant strain on public finances if maintained over time. He noted that similar subsidies contributed to inflationary pressures and weakened incentives to reduce reliance on fossil fuels. The European Commission has echoed these concerns, cautioning member states against excessive spending that could risk fiscal instability. At the same time, the OECD expects the ongoing Middle East conflict to push inflation higher and weigh on global economic growth in the near term .Scarpetta indicated that inflation across G20 economies could still average around 4 per cent in 2026, significantly above earlier projections. Instructions: THIS VIDEO MUST NOT BE EDITED FOR LENGTH TO COMBINE WITH OTHER CONTENT
Keywords: Current Affairs & Politics,OECD,Stefano Scarpetta,fuel,tax cuts,subsidies,inflation,risks,incentive,fossil fuels,renewable energies,public finances,Financial Times,G20,economy
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