Reforms to boost growth, alongside credible tax and spending plans, could help governments avoid a new wave of financial repression, an International Monetary Fund (IMF) official said on Monday.
Neil Shenai, assistant to the director of the IMF’s Strategy, Policy and Review Department, was speaking at the 2026 IMF-World Bank Group Annual Summit in Bangkok.
Organised by the World Bank, IMF, Thailand’s Finance Ministry and the Bank of Thailand, the event brought together global leaders, businesses and other sectors to discuss global economic policy.
Mr Shenai’s session, “The Analytical Corner: The Coming Great Repression? New Measures and a Century of Evidence”, examined quantity-based indicators of financial repression across 17 advanced economies since 1920.
The findings showed that repression peaked after World War II, declined with liberalisation and rose again after the global financial crisis, generating measurable fiscal savings, he said.
He said financial repression had been a major driver of fiscal dynamics in the 20th and 21st centuries. Debt in advanced economies has risen steadily over two decades, driven by persistent deficits, while shorter maturities require governments to seek financing repeatedly, hoping for favourable terms, he said.
Since the global financial crisis, macroprudential measures have encouraged or required financial institutions to hold government debt, while central banks have expanded their balance sheets through asset purchases and quantitative easing, he said.
Mr Shenai outlined two debt-reduction approaches.
Direct measures involve faster growth, higher taxes and lower government spending, the path recommended by the IMF, he said, adding growth can ease social tensions and facilitate political compromise, while transparent debate on tax and spending policies can secure public support.
Indirect measures include unexpected inflation to erode creditors’ claims, central bank money creation to finance fiscal deficits or steering private savings towards the state at favourable rates, he said.
He urged relevant sectors to advocate reforms and build consensus for growth and credible fiscal consolidation.
“Now, I’m not up here to tell you that we are fated for a second great repression, but what I am telling you is that we have a window to act. And that window to act is now,” he said.