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Business and Economics > Budgeting

You are looking at 1 - 6 of 6 items for :

  • Type: Journal Issue x
  • Departmental Papers x
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Cover Departmental Papers
Upgrading Fiscal Frameworks in Asia-Pacific
Enrique Flores
,
Pranav Gupta
,
Yinqiu Lu
,
Paulo A Medas
,
Dinar Prihardini
,
Hoda Selim
,
Weining Xin
, and
Masafumi Yabara
This paper seeks to guide the reform of fiscal frameworks in Asia-Pacific in the context of calls for a more active fiscal policy in a shock-prone world. It highlights that the cost of fiscal support is large and that fiscal frameworks, including fiscal rules, are being put to the test given the sharp increase in debt, high interest and weaker growth prospects. The stress is only compounded by long-term challenges like aging populations, climate change and the need to deliver on the sustainable development goals. In this context, it is timely to review the effectiveness of fiscal policy in Asia-Pacific and seek for ways to strengthen fiscal frameworks. After the global financial crisis, fiscal policy in Asia-Pacific became more countercylical and stronger than in other regions—especially in advanced economies. The paper shows that the degree of countercyclicality has been asymetric, with larger responses during periods of weak growth, and in particular in response to large shocks—the global financial crisis and the pandemic. It highlights that responses to the pandemic were large and used a wide range of tools, and how fiscal and monetary policy complemented each as they responded to large shocks. It looks into the deterioration of debt dynamics in Asia-Pacific, as public debt has been rising persistently across most countries driven by declining growth and rising deficits—particualrly after the global financial crisis for advanced economies and after the pandemic for emerging market and low income countries. The paper reviews fiscal frameworks across Asia-Pacific, including the use of fiscal rules, medium-term fiscal frameworks, and fiscal councils. It describes the characteristics of fiscal rules, which usually focus on debt and budget balances and are set by law but tend to lack well-specified enforcement mechanism or escape clauses. It highlights that compliance with the rules has worsened following the pandemic as—in contrast with the outturns before the pandemic--Asia-Pacific countries tend to show larger deviations relative to other regions. It also shows that despite the increase adoption of medium-term fiscal frameworks in Asia-Pacific forward guidance has been hampered by the lack of binding targets and ex-post analysis. Moreover, they do not seem to have resulted in better macro-fiscal forecast in part due to weak capacity and enforcement, lack of integration with the annual budget, and exposure to shocks—with risk analysis mostly limited to qualitative discussions. Proposed reforms seek to implement a comprehensive, risk-based approach to public finances. They focus on strengthening the medium-term orientation of fiscal policy through credible medium-term fiscal plans, fiscal rules linked to the medium-term strategy and the annual budgets, and a stronger reliance on fiscal councils. They also emphasize the need for a broader view of the public sector as fiscal policy is being conducted through multiple channels, which requires assessing and managing vulnerabilities and a significant improvement in fiscal statistics. They also address aging and climate change by focusing on assessing large intergenerational trade-offs, reporting on long-term debt dynamics, and on green medium-term fiscal frameworks that incorporate the effects of climate change and climate policies.
Keywords:
Fiscal Rules Fiscal Frameworks Medium-term Fiscal Frameworks Public Debt Sustainability automatic stabilizers Climate Change Population Aging; Asia-Pacific country; Asia-Pacific economy; Asia-Pacific region; IMF country team; SRDSF country; Fiscal rules; Fiscal governance; Global financial crisis of 2008-2009; Asia and Pacific; Global; Pacific Islands
Cover Departmental Papers
Monitoring and Managing Fiscal Risks in the East African Community
Mr. Paolo Mauro
,
Mr. Herve Joly
,
Mr. Ari Aisen
,
Mr. Emre Alper
,
Mr. Francois Boutin-Dufresne
,
Mr. Jemma Dridi
,
Mr. Nikoloz Gigineishvili
,
Mr. Tom Josephs
,
Ms. Clara Mira
,
Mr. Vimal V Thakoor
,
Mr. Alun H. Thomas
, and
Mr. Fan Yang
This paper takes stock of the main fiscal risks facing the EAC partner countries. These include macroeconomic shocks, and specific risks, such as the financial performance of the public enterprises, large infrastructure projects, PPPs, and pension funds. In addition, weaknesses in the institutional framework are reviewed. This analysis highlights some of the largest risks and begins to give a sense of the potential magnitudes involved.
Keywords:
DPPP; DP; government; public enterprise; natural resource; country; EAC country; central government; EAC partner state; economic growth; General government expenditure; Public enterprises; Fiscal risks; Budget planning and preparation; Africa; Global
Cover Departmental Papers
Faire du Sénégal un carrefour pour l'Afrique de l'Ouest: Faire du Sénégal un carrefour pour l'afrique de l'Ouest
Mr. Alexei P Kireyev
and
Mr. Ali M. Mansoor
Cette publication du département Afrique dresse le bilan des réalisations du Sénégal au cours des dernières années dans le cadre de programmes appuyés par le FMI et indiquent des domaines de réforme essentiels pour l'avenir. Les services du FMI analysent la nouvelle stratégie de développement du Sénégal, le « Plan Sénégal émergent », qui vise à faire du Sénégal un pays émergent d'ici 2035.
Keywords:
DPPP; DP; exchange rate; public spending; current account; foreign direct investment
Cover Departmental Papers
Making Senegal a Hub for West Africa: Reforming the State, Building to the Future
Mr. Alexei P Kireyev
and
Mr. Ali M. Mansoor
This Departmental Paper takes stock of Senegal’s achievements in the past few years under IMF-supported programs and identifies key reform pillars for the future. IMF staff analyses Senegal's new development strategy, Plan Sénégal Emergent, which aims to make Senegal an emerging market economy by 2035.
Keywords:
DPPP; DP; exchange rate; public spending; current account; foreign direct investment; opportunity cost; private sector; debt management; Exports; Budget planning and preparation; Export diversification; Public investment and public-private partnerships (PPP); Sub-Saharan Africa; West Africa; Global; Africa; North America
Cover Departmental Papers
Libya Beyond the Revolution: Challenges and Opportunities
International Monetary Fund
In the aftermath of the revolution of 2011, Libya faces the complex task of rebuilding its economy, infrastructure, and institutions, and responding to the demands of the population, especially for improved governance. The conflict that accompanied the revolution had a severe impact on the economy, and international financial institutions have responded to the request of the Libyan authorities to provide policy consultations and technical assistantce to help maintain macroeconomic stability. Libya's National Transitional Council (NTC) has taken steps to promote a peaceful political transition, normalize economic conditions, and set out a national reform agenda. In the short term, the authorities must restore security, bring hydrocarbon production fully online, exercise fiscal discipline, resuscitate the banking system, and maintain macroeconomic stability. Medium-term efforts should focus on capacity building, infrastructure renewal, private-sector development, improving education, job creation, and putting in place an effective social safety net, within a framework of transparent and accountable governance. This paper discusses the risks to economic recovery and measures to promote economic diversification and employment growth.
Keywords:
DPPP; DP; government; Libya; reserve account; GDP; country; government financing expenditure; private-sector development; financial situation; liquid financial assets; market value; Commercial banks; Budget planning and preparation; Social assistance spending; Global
Cover Departmental Papers
Fiscal Risks: Sources, Disclosure, and Management
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.
Keywords:
DPPP; DP; fiscal risk; guarantee; debt management; interest rate; contingency reserve; risk mitigation; exchange rate; economic growth; Fiscal risks; Contingent liabilities; Budget planning and preparation; Africa