Fiscal austerity measures are strict policies adopted by governments to reduce their fiscal deficit and debt burden.
Typical austerity measures include:
Cutting government spending: Reducing expenditure on public projects, development programs, subsidies, and social safety nets.
Workforce reductions: Cutting government employees or reducing salaries and benefits.
Raising taxes: Increasing income tax, VAT, or import duties to boost revenue.
These measures are usually taken during difficult times when a government's ability to service its debt is questioned, or when international lenders like the IMF require them as conditions for loans. Greece implemented severe austerity in 2010, sparking massive controversy and social unrest.
In Bangladesh, the government occasionally takes austerity steps such as reducing subsidies or raising fuel prices to manage fiscal pressures.