Fiscal stimulus is one of the tools a government can use to boost a country's economic growth during a slowdown. The two main ways are to increase public spending or to cut taxes.
Why is it important?
It is becoming very important now due to the current economic crisis that has led to economies all over the world experiencing slowing growth.
This has been carried out in different forms. Most recently here, the Singapore Government announced $2.3 billion worth of loans to help businesses stay afloat. In China, the government announced a four trillion yuan (S$886 billion) stimulus package that would be spent mainly on construction projects.
So you want to use the term? Just say...
'With the economy slowing down, fiscal stimulus is needed from the government to boost growth.'
Robin Chan
This article was first published in The Straits Times on November 30, 2008.
