AI-Driven Risk Mitigation Strategies for Addressing Fiscal Deficits: A Techno-Financial Approach to Budgetary Regulation Compliance

The research work contains an original concept of an artificial intelligence (AI) plan of mitigation against risks by treating fiscal deficits and rests on a techno-financial approach to sustain the compliance with a budgetary regulation. According to the model, Hybrid AI-Econometric Model should be recommended which would incorporate machine learning algorithm in predicting fiscal deficits and controlling it. The model will provide real-time data analysis and a prediction of the trend of the economical tendencies by the application of the MATLAB, including its AI Toolbox and Econometrics Toolbox, as the means of implementing an adaptive decision-making. The stress tests of the model were performed to estimate the model response to the extreme economic conditions, such as financial crisis and unpredictable policy changes. The effectiveness of the model was confirmed in the results as the precision in making forecasts, early warning of threats, shocks to the economy became much better. This is dynamic and effective mode of empowering governments and even financial institutions so much so that they can address any fiscal challenges and also be able to keep abreast with laws of the budget even in case of economically vulnerable situations.