FIGURE O.1. GDP growth and GDP growth volatility, 1976-96 and 1999-2019 22

FIGURE O.2. Drivers of growth in East Asian economies, 1971-2023 23

FIGURE O.3. Poverty in EAP, excluding China, 2001-24 24

FIGURE O.4. Income per capita and Gini index, selected EAP economies 25

FIGURE O.5. Fiscal policy for long-term growth and productive jobs: A conceptual framework 27

FIGURE O.6. Government revenue, spending, and public investment 28

FIGURE O.7. Statutory CIT and effective tariff rates, EAP and comparators 31

FIGURE O.8. Government spending on human capital: Selected EAP economies and comparators, 2000-22 32

FIGURE O.9. Human Capital Index, 2020 34

FIGURE O.10. Cyclicality of spending, by size of government and expenditure subcomponent, EAP and comparators, 2000-22 36

FIGURE O.11. Social benefits and public debt during the economic cycle, East Asia and comparators 37

FIGURE O.12. Public debt, growth, and interest rates, East Asia 38

FIGURE O.13. Existing pension schemes and liabilities, EAP 40

FIGURE O.14. Framework for rebuilding fiscal space: Planning, commitment, and resilience 41

FIGURE O.15. Drivers of poverty reduction, selected EAP economies 42

FIGURE O.16. Change in poverty rate, by type of government spending program, EAP and comparators 42

FIGURE O.17. Change in Gini index, by type of government spending program, EAP and comparators 43

FIGURE O.18. Additional growth from aligning education spending with average of aspirational countries, selected EAP economies 45

FIGURE O.19. Benefit-cost ratios for investments in energy and transportation, selected EAP economies 46

FIGURE O.20. Triple dividends of climate adaptation and the example of sectoral benefits in the Philippines 47

FIGURE O.21. Transfers and subsidy cost-effectiveness, selected EAP economies 49

FIGURE O.22. GST revenue and capacity, selected East Asian economies, 2000-20 51

FIGURE O.23. Consumption patterns, by income decile, Indonesia and the Philippines 52

FIGURE O.24. Effective VAT rate, by income decile, after accounting for the enhanced VAT voucher, Singapore 53

FIGURE 1.1. Government revenue, spending, and public investment, EAP and comparators 65

FIGURE 1.2. Statutory CIT and effective tariff rates, EAP and comparators 69

FIGURE 1.3. Maximum corporate income tax holidays, selected EAP economies and comparators, 2022 70

FIGURE 1.4. Statutory PIT rates, EAP and comparators 73

FIGURE 1.5. VAT rates, EAP and comparators, 2025 74

FIGURE 1.6. Tax revenue, by type of tax, EAP and comparators, 2000-22 76

FIGURE 1.7. CIT revenue and presence of MNEs, EAP and comparators 77

FIGURE 1.8. CIT rates and CIT revenues, selected EAP economies, 2000-07 vs. 2020-22 78

FIGURE 1.9. PIT revenue, EAP and comparators, 2000-22 79

FIGURE 1.10. PIT revenue, PIT rate, and informality rate, EAP economies 80

FIGURE 1.11. GST revenue in EAP, 2000-22 81

FIGURE 1.12. Observed and potential VAT revenue, Thailand, EAP, and comparators, 2018 86

FIGURE 1.13. Trade tax revenue, East Asia and comparators, 2020-22 87

FIGURE 1.14. Tariffs, tax revenue, and trade, East Asia, 2000-07 vs. 2020-22 88

FIGURE 1.15. Government spending vs. income and trade, EAP and comparators, 2000-22 89

FIGURE 1.16. Public investment and income, EAP and selected East Asian economies, 2000-19 92

FIGURE 1.17. Economic classification of government spending, East Asia and comparators, 2000-22 93

FIGURE 1.18. Government consumption and income, East Asian economies and comparators 94

FIGURE 1.19. Government spending on social benefits: East Asia, the Pacific Islands, and comparators, 2000-22 96

FIGURE 1.20. Spending on human capital, EAP and comparators, 2000-22 97

FIGURE 1.21. Evolution of government spending, by function, EAP, 2000-22 98

FIGURE 1.22. Human capital and income, EAP and comparators, 2000-22 99

FIGURE 1.23. Subsidies as a share of GDP, selected EAP economies and comparators, 2000-22 101

FIGURE 1.24. Impacts of taxation on FDI and growth 105

FIGURE 1.25. Drivers of GDP growth, EAP and China, 1970-2023 107

FIGURE 1.26. Human capital outcomes, EAP economies and comparators 109

FIGURE 1.27. Education and health components of the Human Capital Index Plus, EAP and comparators, circa 2024 111

FIGURE 1.28. Fixed and mobile broadband, EAP 114

FIGURE 1.29. Benefit-cost ratios for investments in energy and transportation, selected EAP economies 115

FIGURE 1.30. Climate-adjusted estimated infrastructure investment needs 115

FIGURE 1.31. Infrastructure priorities 116

FIGURE 1.32. Human capital investment priorities 117

FIGURE 1.33. Triple dividends of climate adaptation 119

FIGURE 1.34. Sectoral benefits of climate adaptation, the Philippines, by 2030 and 2040 120

FIGURE 1.35. Priorities for climate adaptation, by exposure and capacity level 121

FIGURE 1.36. Population aging and per capita income, selected EAP economies and comparators 122

FIGURE 1.37. Working-age population and share of people working beyond working age, EAP and comparators 123

FIGURE 1.38. Pension spending and contribution rates, selected EAP economies 123

FIGURE 2.1. Volatility, growth, and cyclicality of government spending, 2000-22 144

FIGURE 2.2. Cyclicality and size of government: East Asian economies, Pacific Island countries, and comparators, 2000-22 146

FIGURE 2.3. Tax rate changes and real GDP: East Asian economies, Pacific Island countries, and comparators, 2000-22 153

FIGURE 2.4. Cyclicality, by government expenditure subcomponent, 2000-22 156

FIGURE 2.5. Social benefits during the economic cycle, EAP and comparators 158

FIGURE 2.6. Primary balance, selected East Asian economies and comparators, 2010-19 163

FIGURE 2.7. Primary balance over the cycle: EAP, comparators, and selected EAP economies, 2000-23 164

FIGURE 2.8. Public debt accumulation, EAP and China, 2000-27 170

FIGURE 2.9. Drivers of debt accumulation, EAP and China, 2000-27 171

FIGURE 2.10. Debt, interest rates, and economic growth 175

FIGURE 2.11. Projected debt under different interest rate scenarios, Fiji and Malaysia, 2026-30 176

FIGURE 2.12. Projected debt under different growth scenarios, China and Thailand, 2026-30 177

FIGURE 2.13. Debt composition and maturity, selected EAP economies and comparators 179

FIGURE 2.14. Reliance on concessional public debt: East Asian economies, Pacific Island countries, and comparators, 2015-19 180

FIGURE 2.15. Rebuilding fiscal space: Planning, commitment, and resilience 181

FIGURE 2.16. Fiscal rules, by country income group and type of rule, 1985-2024 185

FIGURE 2.17. Association between primary balance and fiscal rule adoption, East Asia 188

FIGURE 3.1. Poverty in EAP, 2001-24 204

FIGURE 3.2. Change in Gini index, by type of fiscal instrument and income level, all countries 210

FIGURE 3.3. Change in Gini index, by type of fiscal instrument and income level, EAP 211

FIGURE 3.4. Change in poverty rate, by type of fiscal instrument and income level 213

FIGURE 3.5. Change in poverty rate, by type of fiscal instrument, selected EAP economies 214

FIGURE 3.6. Cost-effectiveness of inequality reduction, by major fiscal instrument, global data 216

FIGURE 3.7. Cost-effectiveness in reducing poverty and inequality, by type of fiscal instrument, selected EAP economies 217

FIGURE 3.8. Progressivity of fiscal instruments, by income level 218

FIGURE 3.9. Indirect taxes, transfers, and net impact relative to market income, by decile, selected EAP economies and comparators 222

FIGURE 3.10. Consumption patterns, by income decile, Indonesia and the Philippines 226

FIGURE 3.11. Share and value of VAT preferential rates, by household income decile, Thailand and Viet Nam 228

FIGURE 3.12. Actual VAT revenue, administrative gap, and compliance gap, the Philippines, 2018 229

FIGURE 3.13. VAT policy gap in Indonesia, 2016-21 229

FIGURE 3.14. Share of total direct taxes, by decile and country income level 230

FIGURE 3.15. Direct taxes as a share of market income, by decile and country income level 231

FIGURE 3.16. Share of individuals paying direct taxes, by income decile, Thailand, 2019 232

FIGURE 3.17. Total tax incidence (decile average) and social security incidence (decile average for payers) by decile (percentage of market income),... 232

FIGURE 3.18. Social assistance, energy, and agriculture subsidy spending, by region and income level 233

FIGURE 3.19. Learning poverty and lack of basic skills, by region 234

FIGURE 3.20. Contribution to GDP of quality vs. quantity, and GDP increase by 2100 of doing both 235

FIGURE 3.21. Impact on poverty rate of simulated designs, by budget level and coverage, the Philippines 239

FIGURE 3.22. Impact on poverty gap of simulated designs, by budget level and coverage, the Philippines 240

FIGURE 3.23. Fiscal policy impact on poverty under different social assistance budgets and targeting scenarios, Malaysia 242

FIGURE 3.24. Predicted log household per capita consumption using 2015 PMT models vs. true log household per capita consumption, Indonesia 242

FIGURE 3.25. Cash transfer spending compared to beliefs in why people are poor, selected countries 246

FIGURE 3.26. Beliefs about self-sufficiency and the importance of work 247

FIGURE 3.27. Effective VAT rate, by income decile, after accounting for the enhanced VAT voucher, Singapore 253

FIGURE 4.1. Additional growth from aligning education spending with average of aspirational countries, selected EAP economies 265

FIGURE B1.2.1. Tax capacity, EAP and comparators, 2000-07 vs. 2010-19 83

FIGURE B1.2.2. GST revenue and capacity, EAP and comparators, 2000-20 84

FIGURE B1.5.1. Public vs. private goods: A framework for public spending 126

FIGURE B2.1.1. GDP growth and growth volatility, Pacific Island countries and comparators, 2000-19 148

FIGURE B2.1.2. Reliance on concessional public debt, EAP and comparators, 2015-19 150

FIGURE B2.2.1. Local government spending and procyclicality 152

FIGURE B2.3.1. Fiscal response to COVID-19, by region and in EAP 160

FIGURE B2.3.2. Difference between observed and predicted fiscal response to COVID-19, by region and in EAP 161

FIGURE B2.4.1. Average deviation from primary deficit forecasts, selected EAP economies and comparators, 2011-23 166

FIGURE B2.5.1. Primary government spending and government revenue, Malaysia, 2000-24 172

FIGURE B2.5.2. US 10-year Treasury interest rate and drivers of debt in Malaysia 173

FIGURE B2.5.3. Effective interest rates and interest payments, Malaysia, 2000-24 174

FIGURE B2.8.1. Primary balance, the Philippines, 2000-19 190

FIGURE B3.2.1. Impact on inequality of taxes, transfers, subsidies, and in-kind services, by scenario and income level 237

FIGURE B4.2.1. Adaptation actions cited, by sector 267

FIGURE B4.2.2. Sectoral benefits from climate adaptation investments, the Philippines 269

FIGURE B4.4.1. Marginal benefit of spending and marginal cost of taxation 280

FIGURE B4.5.1. Number of fiscal rules with and without escape clauses 284

FIGURE B4.6.1. Number of independent fiscal councils, by type of economy, 1985-2024 285

FIGURE B4.6.2. Association between fiscal council adoption and sovereign spread 286

FIGURE 2A.1. Government size and cyclicality of primary expense, using different filtering techniques 195

FIGURE 2A.2. Correlation of primary balance forecast with government effectiveness and rule of law 196