Narrow Your Choices

Refine By Countries

Refine By Series

Refine By Language

Refine By Date

—

Refine By IMF Taxonomy

Refine By JEL Taxonomy

Refine by LOC Taxonomy

Refine By THEMA Taxonomy

  • Print
  • Save

Business and Economics > Public Finance

You are looking at 1 - 10 of 130 items for :

  • Type: Journal Issue x
  • El Salvador x
Clear All Modify Search
Cover IMF Staff Country Reports
El Salvador: Request for Extended Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for El Salvador
International Monetary Fund. Western Hemisphere Dept.
El Salvador has recovered well from the pandemic, supported by robust remittances and buoyant tourism flows, amid a sharp improvement in the country’s security situation. Inflation has fallen and the external imbalances have narrowed more recently, consistent with a gradual improvement in public finances and favorable terms of trade. In this context, sovereign spreads have come down sharply with recent debt buyback operations helping to ease near-term external financing needs. Despite recent progress, El Salvador’s macroeconomic imbalances remain significant, stemming from high fiscal deficits and debt, as well as low external and financial buffers, in the context of dollarization. Meanwhile, underlying productivity remains low, reflecting in part persistent social and infrastructure gaps, as well as a legacy of weak governance and transparency, which have discouraged investment. The Bukele administration is intent on focusing its second mandate on addressing pending macroeconomic and structural challenges and boosting economic growth, under an IMF-supported program.
Keywords:
audited financial statements; staff appraisal; publication of asset declaration; list of statement; Bitcoin transparency; Public sector; Anti-money laundering and combating the financing of terrorism (AML/CFT); Pension spending; Central America; Caribbean; Global
Cover IMF Working Papers
Understanding the Macroeconomic Effects of Natural Disasters
Ha Nguyen
,
Alan Feng
, and
Mercedes Garcia-Escribano
Climate change is causing more frequent and devastating natural disasters. The goal of this paper is two-fold. First, it examines the dynamic effects of natural disasters on the growth of output and its components. Government expenditure in advanced economies (AEs) rises immediately in the same year of the natural disaster, offsetting the decline in private investment growth and thereby mitigating the negative effect on output growth. As a result, output growth in AEs is not significantly affected by natural disasters. In contrast, the increase in government expenditure in emerging markets and developing countries (EMDEs) after a natural disaster is smaller and thus, unable to mitigate the contemporaneous negative effect on output growth (which mainly reflects the fall in investment in non-small-island EMDEs and in net exports in small-island EMDEs). In addition, the output recovery in the subsequent year does not fully offset the decline during the year of the disaster. Second, this paper assesses the role of pre-existing country characteristics in mitigating the adverse impact of natural disasters. The paper finds that small islands and countries with limited pre-disaster fiscal space tend to experience more significant declines in output growth following a natural disaster.
Keywords:
Natural disasters; economic growth; robustness check; export commodity price shock; output recovery; growth of output; aggregate impact; Commodity price shocks; Fiscal space; Fiscal stance; Global
Cover Departmental Papers
Violent Crime and Insecurity in Latin America and the Caribbean: A Macroeconomic Perspective
Paul M Bisca
,
Vu Chau
,
Paolo Dudine
,
Raphael A Espinoza
,
Jean-Marc Fournier
,
Pierre Guérin
,
Niels-Jakob H Hansen
, and
Jorge Salas
Violent crime and insecurity remain major barriers to prosperity in Latin America and the Caribbean (LAC). With just 8 percent of the global population, LAC accounts for a third of the world’s homicides. Building on the existing literature, this paper aims to support economic policymakers and development partners by exploring the interplay between insecurity and macroeconomic outcomes, with emphasis on the relationship between violent crime and growth, the business climate, and public finances. The analysis shows that national-level crime indicators mask huge internal disparities, and that municipalities with 10 percent higher homicide rates have lower economic activity by around 4 percent. The paper develops an innovative measure of insecurity—the share of crime-related news—and shows its association with lower industrial production. Using firm-level data, it also estimates that the direct costs of crime, for firms, are around 7 percent of annual sales, and these are much higher when gangs and drug-trafficking organizations are present. Violent crime rises with macroeconomic instability, inequality, and governance problems. Using a large cross-country panel, the analysis finds that homicides increase when a country is affected by negative growth, high inflation, or a worsening of inequality. Victimization surveys indicate that where populations are concerned with the rule of law—impunity and police corruption—only one in five victims file their case with the police. Lack of trust and crime can be mutually reinforcing. Finally, the paper documents the fiscal burden of security provision and finds that spending tends to be inelastic to crime and that spending efficiency could be improved. The paper concludes with policy lessons and areas for additional collaboration between national authorities, international partners, and key stakeholders. These focus on data collection and analysis, economic policies that may address the root causes and manifestations of crime, strengthening rule of law institutions, and intensifying regional exchanges on security and public finance issues.
Keywords:
Crime; organized crime; homicides; homicide dates; costs of crime; macroeconomic stability; growth; drivers of crime; crime impunity; private sector development; violent crime; crime indicator; development in Latin America and the Caribbean; Public order and safety spending; Drug trafficking; Caribbean; Central America; South America; Global
Cover IMF Working Papers
The Role of IMF Arrangements in Restoring Access to International Capital Markets
Joseph Kogan
,
Romina Kazandjian
,
Shijia Luo
,
Moustapha Mbohou
, and
Hui Miao
Using a database of emerging market fundamentals and bond index spreads across 56 frontier and emerging market countries rated below investment grade during the period 2002-22, we assess whether IMF arrangements can restore access to international capital markets (ICM) for countries in distress through liquidity and conditionality channels. We find that global financial conditions and debt/GDP are the most important determinants of access to ICM within the horizon of a typical IMF arrangement. Using an event study methodology, we show that spreads increase prior to the start of an IMF arrangement and then decrease gradually. By exploiting different characteristics of IMF arrangements, we find evidence that the reforms implemented under the IMF arrangement, as measured by rounds of successful IMF reviews, matter more in the medium term than the IMF’s role as a liquidity provider. These results are consistent with our analysis of 55 credit rating upgrades to ICM access levels, which suggests that debt reduction plays the largest role and that IMF arrangements lend credibility to reforms.
Keywords:
International capital markets; market access; IMF; debt crisis; debt rescheduling; default; sovereign debt; sovereign debt restructuring; sovereign bonds; Eurobonds; IMF arrangement; IMF review; IMF working paper 2024/173; capital markets department; IMF effect; Credit ratings; Bonds; Current account balance; Global
Cover IMF Staff Country Reports
Guatemala: Technical Assistance Report-International Taxation Challenges and Options
International Monetary Fund. Fiscal Affairs Dept.
This paper focuses on the technical assistance report on international taxation challenges and options in Guatemala. The topic of treaties has garnered special attention in Guatemala as of late, requiring a strategy to be devised. Treaties foster a better business climate and can encourage foreign direct index (FDI) in sectors other than those already benefiting from special regimes. This would be welcome in Guatemala because its FDI quota is low, even for the Central American region. Treaties can also promote the expansion of certain businesses operating from Guatemala; especially export services, which can currently be subject to double taxation. Nevertheless, the many empirical studies that have been conducted offer no conclusive results. The economic literature could not confirm a meaningful causal relationship between signed treaties and FDI, particularly for developing countries. The same applies to studies on Latin America. At present, to enter into treaties, Guatemala requires the development of an own model that protects the right to tax income at source and to sign treaties with countries where a potential double-taxation problem might inhibit a likely flow of investment. The increase in special regimes in Guatemala might eventually risk running into this international trend.
Keywords:
Foreign-direct investment; double-taxation avoidance treaties; transfer-pricing; base erosion and profit-shifting.; PwC tax specialist; foreign direct investment; tax practice; tax architecture; tax context; FDI data; taxation challenge; tax purpose; maquila regime; tax strategy; Foreign direct investment; Income; Double taxation; Income and capital gains taxes; Transfer pricing; Global; Caribbean; Central America
Cover IMF Staff Country Reports
Panama: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper presents the main features and weaknesses of the current Panamanian tax system and provides an international comparison of its performance. Panama’s macroeconomic performance has been notably robust. Panama’s macroeconomic performance has been notably robust, but Panama’s tax collection has been historically low. A tax system without adequate revenues led to chronic fiscal deficits and a lack of resources to invest in human capital (education and health) and promote social inclusion policies. In addition, the tax system is notably regressive, and several rules are very inefficient and distortive contradicting the overall policy objective of the country to attract investment. Taxation of the business sector is very complex. On the other hand, the system is very generous regarding benefits. Overall, the desirable reform direction is clear: A reduction in tax incentives, following their analysis, as well as stronger anti-abuse provisions, and revenues from an international minimum tax can finance reductions in the inefficient parts of the tax system, such as the multiple business taxes and the strict loss carry forward.
Keywords:
VAT indicator; directorate General; C. consumption tax; tax comparison; revenue performance; International reserves; Total factor productivity; Tax incentives; Corporate income tax; Caribbean; Central America; South America; Global; Asia and Pacific
Cover IMF Staff Country Reports
El Salvador: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for El Salvador
International Monetary Fund. Western Hemisphere Dept.
The pandemic interrupted ten years of growth, but El Salvador is rebounding quickly. Robust external demand, resilient remittances, and a sound management of the pandemic—with the help of a disbursement under the Rapid Financing Instrument (RFI) (SDR287.2 million or US$389 million) approved in April 2020—are supporting a strong recovery. Persistent fiscal deficits and high debt service are leading to large and increasing gross fiscal financing needs.
Keywords:
Salvadorian authorities; authorities of El Salvador; anti-smuggling plan; government finance statistics manual; El Salvador's authorities; authorities' estimate; Virtual currencies; International reserves; Currencies; Remittances; Central America; Caribbean; Global
Cover IMF Working Papers
Financing for the Post-pandemic Recovery: Developing Domestic Sovereign Debt Markets in Central America
Jean François Clevy
,
Mr. Guilherme Pedras
, and
Mrs. Esther Perez Ruiz
The pandemic has urged countries around the globe to mobilize financing to support the recovery. This is even more relevant in Central America, where the policy response to cushion the pandemic’s economic and social impact has accentuated pre-existing debt vulnerabilities. This paper documents the potential for local currency bond markets to diversify and expand financing for the recovery, lowering bond yields, funding volatility, and exposure to global shocks. The paper further identifies priority actions, both national and regional, to support market development.
Keywords:
Bond Markets; Fiscal Deficit; Public Debt; Global Spillovers.; financing condition; pre-existing debt vulnerability; sovereign bond bond yield; market development; LCBM development; Yield curve; Securities markets; Government debt management; Government securities; Global; Central America
Cover Policy Papers
Review of The Debt Sustainability Framework For Market Access Countries
International Monetary Fund. Strategy, Policy, &amp
and
Review Department
A careful review has revealed significant scope to modernize and better align the MAC DSA with its objectives and the IMF’s lending framework. This note proposes replacing the current framework with a new methodology based on risk assessments at three different horizons. Extensive testing has shown that the proposed framework has much better predictive accuracy than the current one. In addition to predicting sovereign stress, the framework can be used to derive statements about debt stabilization under current policies and about debt sustainability.
Keywords:
IMF team; resource requirement; definition of stress event; sustainability assessment; I. backtesting result; Debt sustainability analysis; Debt sustainability; Fiscal stance; Debt refinancing; Global
Cover IMF Staff Country Reports
El Salvador: Staff Report-Request for Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for El Salvador
International Monetary Fund. Western Hemisphere Dept.
This paper discusses El Salvador’s IMF Staff report on Request for Purchase Under the Rapid Financing Instrument (RCI). This assistance is expected to help El Salvador direct funds swiftly to the country’s most affected sectors, including the healthcare system. El Salvador has adopted strict measures to prevent and contain the pandemic since early February—even before the first case was diagnosed—including travel restrictions, mandatory quarantine for exposed citizens, suspension of nonessential public and private sector operations, and a nationwide shelter-in-place order. The authorities’ emergency response also comprises measures to mitigate the economic impact of the pandemic on the population, including through targeted cash transfers to vulnerable households and tax relief in the most affected economic sectors. IMF financing will help preserve fiscal space and catalyze significant funding from other multilateral institutions. The IMF continues to closely monitor El Salvador’s situation and stands ready to provide policy advice and further support as needed.
Keywords:
ISCR; CR; financing; government; GDP; balance of payments gap; IMF lending arrangement; Salvadorian authority; El Salvador's request; financing gap; requested disbursement; Fiscal stance; International reserves; Public sector; Global; Central America; COVID-19