Fiscal sustainability risks remain elevated, as progress in some regions has been offset by delays in fiscal consolidation in others. Most advanced economies are reducing fiscal deficits this year, but the United States has put adjustment on hold, and fiscal adjustment had been postponed in Japan relative to the pace envisaged in the November Fiscal Monitor, even before the recent earthquake, which will involve additional fiscal costs. Debt ratios are still rising in most advanced economies, and financing needs are at historical highs. Although market conditions are now favorable for most, markets have in the past reacted late and abruptly to deteriorating fiscal conditions. The fiscal outlook for emerging economies is more favorable, but this reflects in part the tailwinds of high asset and commodity prices, low interest rates, and strong capital inflows; their reversal could leave fiscal positions exposed in many cases. Moreover, some of these economies may be gradually overheating. For advanced economies, steady annual progress, starting now, toward bringing debt ratios to prudent levels in the medium term is essential. Emerging economies should use revenues associated with current favorable conditions to rebuild fiscal space rather than to increase spending in the near term. Both groups should make progress on structural reforms to enhance growth and equity, and strengthen fiscal institutions and transparency.