The International Monetary Fund (IMF) updated its Fiscal Monitor report on Tuesday, which said governments should avoid responding to any unexpected downturn in growth by further tightening policies.

In advanced economies, fiscal deficits fell in 2011 by about 1 percent of GDP overall to 6.6 percent from the previous year, said the report.

The headline deficit fell by 2 percent in the euro area to 4.3 percent in 2011. Japan was the only large advanced economy to implement a fiscal expansion last year owing to reconstruction related to the natural disaster, and therefore the deficit ratio rose by 0.8 percent to 10.1 percent.

However, the public debt in advanced economies continued to accumulate rapidly in 2011 to 103.5 percent of GDP, said the report.

The public debt in the euro area rose by 3.1 percent to 88.4 percent in 2011. Among euro countries, only Germany experienced a contracting trend. And Japan saw an increase of 14.4 percent in debt ratio to 233.4 percent.

Fiscal deficit ratio in emerging economies decreased by 1.0 percent to 2.6 percent in 2011, and public debt ratio edged down by 3.0 percent to 37.8 percent, said the report.

Many advanced economies had introduced new measure to support the achievement of their deficit target, and the deficit ratio was expected to decrease by 0.9 percent this year, and public debt ratio was expected to increase by 4.1 percent, noted the report. Meanwhile, the deficit ratio in emerging markets was expected to increase by 0.1 percent, and public debt ratio was expected to decrease by 1.4 percent.

IMF also warned too rapid consolidation during 2012 could exacerbate downside risks given the weak economic environment and increasing market concerns. Countries should watch the speed of short-term adjustment, but medium-term consolidation remains a priority.

Fiscal policy in emerging markets should reflect the different conditions and risks they face, said the report.

Specifically, emerging economies with rapidly widening output gaps and declining inflation have room to make policy more supportive of economic activity, given relatively low debt levels.

In others, however, high debt and lingering large deficits mean there is little space for more than the operation of automatic stabilizers should growth slow further.

Emerging economies highly dependent on commodity revenues and external inflows also need to assess cautiously risks of a large and protracted decline in such financing source.