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Author: Mr.Julio Escolano Publisher: International Monetary Fund ISBN: 1498373518 Category : Business & Economics Languages : en Pages : 36
Book Description
The sizeable fiscal consolidation required to stabilize the debt-to-GDP ratios in several countries in the aftermath of the global crisis raises a crucial question on its feasibility. To answer this question, we rely on historical evidence from a sample of 91 adjustment episodes of countries during 1945–2012 that needed and wanted to adjust in order to stabilize debt to GDP. We find that, in at least half the cases, countries improved their cyclically adjusted primary balances by close to 5 percent of GDP. We also observe that, while countries typically make substantial efforts to stabilize debt, once this objective is achieved, they tend to ease their primary balances and do not necessarily get back to their initial lower debt-to-GDP ratio. We find that consolidations tended to be larger when the initial deficit was high and adjustment efforts were sustained over time. Fiscal adjustments also tended to be larger when accompanied by an easing of monetary conditions and, to a lesser extent, by an improvement in credit conditions.
Author: Mr.Julio Escolano Publisher: International Monetary Fund ISBN: 1498373518 Category : Business & Economics Languages : en Pages : 36
Book Description
The sizeable fiscal consolidation required to stabilize the debt-to-GDP ratios in several countries in the aftermath of the global crisis raises a crucial question on its feasibility. To answer this question, we rely on historical evidence from a sample of 91 adjustment episodes of countries during 1945–2012 that needed and wanted to adjust in order to stabilize debt to GDP. We find that, in at least half the cases, countries improved their cyclically adjusted primary balances by close to 5 percent of GDP. We also observe that, while countries typically make substantial efforts to stabilize debt, once this objective is achieved, they tend to ease their primary balances and do not necessarily get back to their initial lower debt-to-GDP ratio. We find that consolidations tended to be larger when the initial deficit was high and adjustment efforts were sustained over time. Fiscal adjustments also tended to be larger when accompanied by an easing of monetary conditions and, to a lesser extent, by an improvement in credit conditions.
Author: Vitor Gaspar Publisher: International Monetary Fund ISBN: 1475547900 Category : Business & Economics Languages : en Pages : 548
Book Description
Two main themes of the book are that (1) politics can distort optimal fiscal policy through elections and through political fragmentation, and (2) rules and institutions can attenuate the negative effects of this dynamic. The book has three parts: part 1 (9 chapters) outlines the problems; part 2 (6 chapters) outlines how institutions and fiscal rules can offer solutions; and part 3 (4 chapters) discusses how multilevel governance frameworks can help.
Author: International Monetary Fund Publisher: International Monetary Fund ISBN: 1498346219 Category : Business & Economics Languages : en Pages : 35
Book Description
growth in expenditure, GCC governments have started to implement significant fiscal consolidation measures, but more needs to be done. Rapid population growth and booming oil revenues led to large increases in government spending in the GCC in the decade to 2014, which now stands high by international standards. This expenditure is dominated by compensation of employees and other current spending which are large in percent of GDP compared to Emerging Market (EM) countries and other oil exporters. This keeps overall spending above levels consistent with long-term fiscal sustainability and intergenerational equity. The international experience with large fiscal adjustments provides some key lessons for GCC countries. This experience suggests that growth outcomes improve when fiscal adjustments are sustained as part of credible multi-year fiscal plans, rely on expenditure more than revenue adjustment, and lead to improvements in expenditure composition (away from current outlays to more productive spending) and the structure of revenue (away from direct to indirect taxation). Successful fiscal adjustments also tend to be part of wider structural reforms that support growth.
Author: International Monetary Fund. African Dept. Publisher: International Monetary Fund ISBN: 151351864X Category : Business & Economics Languages : en Pages : 86
Book Description
This paper discusses Togo’s Fifth Review Under the Extended Credit Facility (ECF) Arrangement. The report highlights that the economic recovery seems to be taking hold. Inflation stood at 0.6 percent at end-July 2019. Given high debt levels, revenue mobilization efforts and spending prioritization should continue, while addressing the persistent underperformance on social spending to enhance economic inclusiveness and to reduce poverty. It is important to address the weaknesses in the two public banks transparently. A successful privatization of these two banks would safeguard financial stability and minimize costs to the State budget. Broader financial sector developments should also be monitored, and corrective actions should be taken as needed, including in terms of the high nonperforming loans. Structural reforms are progressing on tax policy, revenue administration, and public expenditure management. Significant progress has also been made in the improvement of the business environment, which is expected to boost domestic and foreign private investment.
Author: Komla Dzigbede Publisher: Edward Elgar Publishing ISBN: 1800379714 Category : Political Science Languages : en Pages : 459
Book Description
This scholarly Research Handbook captures key observations and analyses within the field of public financial management. It offers much-needed insights into possible future research ventures while presenting contemporary summaries of past studies in this ever-evolving field.
Author: Mr.Antonio David Publisher: International Monetary Fund ISBN: 1484353056 Category : Business & Economics Languages : en Pages : 67
Book Description
This paper presents a new database of fiscal consolidations for 14 Latin American and Caribbean economies during 1989-2016. We focus on discretionary changes in taxes and government spending primarily motivated by a desire to reduce the budget deficit and long-term fiscal health and not by a response to prospective economic conditions. To identify the motivation and budgetary impact of the fiscal policy changes, we examine contemporaneous policy documents, including Budgets, central bank reports, and IMF and OECD reports. The resulting series can be used to estimate the macroeconomic effects of fiscal consolidation for these economies
Author: International Monetary Fund. Fiscal Affairs Dept. Publisher: International Monetary Fund ISBN: 1498345662 Category : Business & Economics Languages : en Pages : 61
Book Description
Comprehensive analysis and management of fiscal risks can help ensure sound fiscal public finances and macroeconomic stability. This has been underscored by the global financial crisis and the more recent collapse in commodity prices, which starkly illustrate the vulnerability of public finances to risk. Indeed, over the past quarter century, governments experienced on average an adverse fiscal shock of 6 percent of GDP once every 12 years, with some of the largest stemming from financial crises. Countries need a more complete understanding of these potential threats to their fiscal position. Existing fiscal risk disclosure and analysis practices tend to be incomplete, fragmented, and qualitative in nature. A more comprehensive and integrated assessment of the potential shocks to government finances, in the form of a fiscal stress test, can help policymakers simulate the effects of shocks to their central forecasts and their implications for government solvency, liquidity, and financing needs. Comprehensive, reliable, and timely fiscal data covering all public entities, stocks, and flows are a necessary foundation for such analysis. Countries should also enhance their capacity to mitigate and manage fiscal risks. Fiscal risk management practices are often blunt, ad hoc, and too focused on imposing limits on the creation of exposures. Countries need to expand their toolkits for fiscal risk management and adopt the use of instruments to transfer, share, or provision for risks. In doing so, countries need to weigh the possible benefits from reducing their exposure to shocks against the financial and other costs of the policies that may be needed. Finally, countries should make greater use of probabilistic forecasting methods when setting long-run objectives and medium-term targets for fiscal policy. The paper illustrates how simple probabilistic tools can be used to map the uncertainty around medium-term trajectories for public debt. In combination with fiscal stress tests, these tools can provide valuable information regarding the probabilities that a country will stay within the debt ceilings embedded in their fiscal rules. The Fund is playing an important role in supporting improvements in fiscal risk analysis and management among its members. This includes technical assistance in constructing public sector balance sheets; developing institutions and capacity to identify specific fiscal risks and to quantify their potential impact; undertaking fiscal stress tests; and integrating risks into the design of medium-term fiscal targets.
Author: Santiago Herrera Publisher: World Bank Publications ISBN: 1464815208 Category : Business & Economics Languages : en Pages : 73
Book Description
Policy makers in Latin America and the Caribbean (LAC) often complain that poor fiscal performance in their countries is a result of a high degree of spending rigidity. Despite being a common complaint, the issue has remained largely ignored by the literature because of the lack of adequate measures of rigidity that allow cross-country and time series comparability. This report helps close this gap by introducing a new measure of spending rigidities that can be easily applied to multiple countries. It focuses on the categories of spending that are naturally inflexible--wages, pensions, transfers to subnational governments, and debt service--and separates them into two components: structural and nonstructural. The structural component is determined by economic, demographic, and institutional fundamentals. The nonstructural component is determined by short-run transitory factors associated with business and political cycles. The degree of rigidity of spending is then proxied by the ratio of structural spending to total spending, with a higher value indicating that spending is driven mostly by factors out of the policy makers’ control. This concept of rigidity was applied to 120 countries for the years 2000†“17 and produced several interesting results: • Advanced economies and developing countries in other regions have higher levels of rigidity than countries in LAC. • The sources of rigidity vary by country. • Higher rigidity is associated with higher spending levels, higher tax rates, higher public debt, and lower efficiency of public spending. • Rigidity has pervasive effects on fiscal sustainability, increasing the country’s financing needs and reducing the probability of the country starting a fiscal adjustment. Given these pervasive effects of spending rigidity, the report concludes by discussing several policies to contain the sources of rigidity in the long term, ranging from the importance of deepening the pension reform process to the need of establishing strong fiscal institutions promoting medium-term fiscal planning.
Author: International Monetary Fund. African Dept. Publisher: International Monetary Fund ISBN: 1484387724 Category : Business & Economics Languages : en Pages : 47
Book Description
This Selected Issues paper estimates the potential growth rate for South Africa using different methodologies. In line with existing studies and findings for other emerging markets, the paper finds that South Africa’s potential growth rate has declined in the post global financial crisis period. Though there is substantial uncertainty, South Africa’s potential growth is estimated to have fallen from an average of 3.5 to 4 percent during 2000–08 to 2.25 to 2.50 percent in 2010–14, implying that the output gap in 2014 would be between –0.5 and –1.3 percent of GDP.
Author: Mr.Serhan Cevik Publisher: International Monetary Fund ISBN: 1513519123 Category : Business & Economics Languages : en Pages : 22
Book Description
This paper assesses the cyclicality and sustainability of fiscal policy in Belize and applies a stochastic simulation model to determine the optimal set of fiscal rules. The empirical analysis shows that fiscal policy in Belize has been significantly procyclical and unsustainable much of the period since 1976. While the government’s recent commitment to maintain a primary surplus of at least 2 percent of GDP until 2021 is supporting debt reduction, stochastic simulations indicate that further improvement in the primary balance is necessary to reliably bring the debt-to-GDP ratio to a sustainable path. Given Belize’s history of large economic shocks, this paper proposes explicit fiscal rules designed for countercyclical policy and debt sustainability. It recommends integrating such rules into a well-designed fiscal responsibility law and establishing an independent fiscal council to improve accountability and transparency.
Author: Mr.Julio Escolano
Author: Mr.Julio Escolano
Author: Vitor Gaspar
Author: International Monetary Fund
Author: International Monetary Fund. African Dept.
Author: Komla Dzigbede
Author: Mr.Antonio David
Author: International Monetary Fund. Fiscal Affairs Dept.
Author: Santiago Herrera
Author: International Monetary Fund. African Dept.
Author: Mr.Serhan Cevik