The paper discusses a model in which growth is a negative function of fiscal burden. Moreover, growth discontinuously switches from high to low as the fiscal burden reaches a critical level. The paper provides an overview of key elements of corporate bankruptcy codes and practice around the world that are relevant to the debate on sovereign debt restructuring. It also describes the broad trends in international financial integration for a sample of industrial countries and explains the cross-country and time-series variation in the size of international balance sheets.
Ms. Lusine Lusinyan, Aliona Cebotari, Ricardo Velloso, Mr. Jeffrey M. Davis, Mr. Amine Mati, Murray Petrie, and Mr. Paolo Mauro
This paper analyzes the main sources of fiscal risks, including from unexpected changes in macroeconomic variables and banking crises, which can have major consequences for countries fiscal and public debt sustainability. It builds on an overview of existing practices in a wide range of countries to provide practical suggestions on how to promote disclosure of such risks and on risk mitigation and management. The paper was written in response to requests from IMF member countries for advice on this subject. The paper also includes an example of a possible statement of fiscal risks.
International Monetary Fund. External Relations Dept.
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Kazakhstani banks continue to suffer from a high and rising stock of nonperforming loans. A centralized approach to asset resolution is warranted, and could be based on a reinvigorated Distressed Asset Fund. A robust and transparent public financial management system should be an integral part of any effective fiscal framework. Deeper and sophisticated domestic financial markets will help decline in dollarization and the associated risks. A sound medium-term fiscal framework, supportive monetary and exchange rate policies, and overall financial sector reform is required.
Indonesia has improved fiscal transparency; tax legislation has been substantially revised; tax administration is improving; legal and administrative measures have been adopted to improve public sector governance; and important steps have been taken to rationalize government banking arrangements. However, much remains to be done to improve transparency. There is a large but crucial agenda to improve the monitoring of subnational budgetary and debt developments so as to improve the transparency and quality of fiscal policy at the general government level.
As part of the Switzerland State Secretariat for Economic Affairs (SECO) project, a technical assistance mission visited Jakarta, Indonesia, during January 8–12, 2018, to develop the capacity to compile integrated sectoral accounts and balance sheets data. The mission reviewed the results of the work undertaken to implement the recommendations of the September 2017 mission.
This Selected Issues paper for Indonesia uses a small structural macroeconomics model of the Indonesian economy to analyze the inflation outlook and monetary policy challenges. The Bank of Indonesia (BI) introduced its Inflation Targeting Framework in July 2005 with the goal to reduce inflation in the medium term to 3 percent. BI’s official mandate is stability of the rupiah, both internal and external, and BI views the inflation targeting regime with a floating exchange rate as the best strategy to fulfill that mandate.
International Monetary Fund. Asia and Pacific Dept
This Selected Issues paper examines the implications of lower crude oil prices on Malaysia’s economy. Although Malaysia’s net oil exports are now very small as a share of GDP, its gas exports are sizeable. The paper provides some background on the structure of energy production and trade in Malaysia, and presents results from empirical analysis of the oil prices on Malaysia’s growth. It is concluded that the decline in prices is likely to have a net negative impact on growth, even though the recent decline in oil prices partially reflects supply considerations.