Impact Trust • Working glossary

Fiscal space

The budgetary room a government has to invest in priorities without jeopardising stability.

Details

Our Take
Central to understanding the doom loop: climate impacts eat fiscal space, leaving less for resilience investment. Explains why some National Societies operate in countries where government support is structurally impossible - not because of political will but because the fiscal space has been consumed.
Examples of Use
Public finance, IMF, development economics
Synonyms/Variants
Budget headroom; Fiscal capacity; Financial room to manoeuvre
Typical everyday wording
How much money a government actually has to spend on priorities