METHODOLOGICAL AND STATISTICAL APPENDIX
Author: International Monetary Fund. Fiscal Affairs Dept.
Language:
English
Keywords:
FM; country abbreviation; def; term; financial crisis responsibility fee; item; government debt; interest rate; potential GDP; General government expenditure; General government balance; Fiscal stance; Budget planning and preparation
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Abstract

This appendix comprises four sections: fiscal policy assumptions, data and conventions, economy groupings, and statistical tables. The assumptions underlying the estimates and projections for 2012–17 are summarized in the first section. The second section provides a general description of the data and of the conventions used for calculating economy group composites. The classification of countries in the various groups presented in the Fiscal Monitor is summarized in the third section. The last section comprises the statistical tables on key fiscal variables. Data in these tables have been compiled on the basis of information available through April 2012.

This appendix comprises four sections: fiscal policy assumptions, data and conventions, economy groupings, and statistical tables. The assumptions underlying the estimates and projections for 2012–17 are summarized in the first section. The second section provides a general description of the data and of the conventions used for calculating economy group composites. The classification of countries in the various groups presented in the Fiscal Monitor is summarized in the third section. The last section comprises the statistical tables on key fiscal variables. Data in these tables have been compiled on the basis of information available through April 2012.

Fiscal Policy Assumptions

The historical data and projections of key fiscal aggregates are in line with those of the April 2012 World Economic Outlook (WEO), unless highlighted. For underlying assumptions, other than on fiscal policy, see the April 2012 WEO.

The short-term fiscal policy assumptions used in the WEO are based on officially announced budgets, adjusted for differences between the national authorities and the IMF staff regarding macroeconomic assumptions and projected fiscal outturns. The medium-term fiscal projections incorporate policy measures that are judged likely to be implemented. In cases in which the IMF staff has insufficient information to assess the authorities’ budget intentions and prospects for policy implementation, an unchanged structural primary balance is assumed, unless indicated otherwise. The specific assumptions relating to selected economies follow.

Argentina. The 2012 forecasts are based on the 2011 outturn and IMF staff assumptions. For the outer years, the IMF staff assumes unchanged policies.

Australia. Fiscal projections are based on IMF staff projections and the 2011–12 budget, the 2011–12 midyear economic and fiscal outlook, and the Australian Bureau of Statistics.

Austria. Projections take into account the 2013–16 federal financial framework, as well as associated further implementation needs and risks.

Belgium. IMF staff projections for 2012 and beyond are based on unchanged policies.

Brazil. The 2012 forecast is based on the budget and subsequent updates announced by the authorities. In this and outer years, the IMF staff assumes adherence to the announced primary target and further increase in public investment in line with the authorities’ intentions.

Canada. Projections use the baseline forecasts in the Economic Action Plan 2012: Jobs, Growth, and Long-Term Prosperity (March 29, 2012). The IMF staff makes some adjustments to this forecast for differences in macroeconomic projections. The IMF staff forecast also incorporates the most recent data releases from Finance Canada (January 2012 Fiscal Monitor, released on March 29, 2012) and Statistics Canada, including federal, provincial, and territorial budgetary outturns through the end of 2011:Q4.

China. For 2011, the government is assumed to continue and complete the stimulus program it announced in late 2008. The withdrawal of the stimulus is assumed to start in 2011, resulting in a negative fiscal impulse of about 1½ percent of GDP. For 2012, the government is assumed to slow the pace of fiscal consolidation; the fiscal impulse is assumed to be neutral.

Denmark. Estimates for 2012–13 are aligned with the latest official budget estimates, adjusted where appropriate for the IMF staff’s macroeconomic assumptions. For 2014–17, the projections incorporate key features of the medium-term fiscal plan as embodied in the authorities’ 2011 Convergence Program submitted to the European Union.

France. Estimates for 2011 are based on preliminary data on outturn for central government only. Projections for 2012 and beyond reflect the authorities’ 2011–14 multiyear budget, adjusted for two fiscal packages and differences in assumptions on macroeconomic and financial variables, and revenue projections.

Germany. Estimates for 2011 are preliminary estimates from the Federal Statistical Office of Germany. The IMF staff’s projections for 2012 and beyond reflect the authorities’ adopted core federal government budget plan adjusted for the differences in the IMF staff’s macroeconomic framework and staff assumptions about fiscal developments in state and local governments, the social insurance system, and special funds. The projections also incorporate authorities’ plans for tax reduction in 2013–14. The estimate of gross debt includes portfolios of impaired assets and noncore business transferred to institutions that are winding up, as well as other financial sector and EU support operations.

Greece. Macroeconomic, monetary, and fiscal projections for 2012 and the medium term are consistent with the policies agreed to between the IMF staff and the authorities in the context of the Extended Fund Facility. The data include fiscal data revisions for 2006–09. These revisions rectify a number of shortfalls with earlier statistics. First, government-controlled enterprises whose sales cover less than 50 percent of production costs have been reclassified into the general government sector, in line with Eurostat guidelines. A total of 17 such enterprises or entities have been identified and reclassified in this way, including a number of large loss-making entities. The reclassification implies that the debt of these entities (7¼ percent of GDP) is now included in headline general government debt data and that their annual losses increase the annual deficit (to the extent their called guarantees were not already reflected). Second, the revisions reflect better information on arrears (including tax refund arrears, arrears on lump sum payments to retiring civil servant pensioners, and arrears to health sector suppliers), as well as corrections of social security balances on account of corrected imputed interest payments, double-counting of revenues, and other inaccuracies. Finally, new information on swaps has also become available and further helps explain the upward revision in debt data.

Hong Kong SAR. Projections are based on the authorities’ medium-term fiscal projections.

Hungary. Fiscal projections include IMF staff projections of the macroeconomic framework and of the impact of existing legislated measures, as well as fiscal policy plans announced at end-December 2011.

India. Historical data are based on budgetary execution data. Projections are based on available information on the authorities’ fiscal plans, with adjustments for IMF staff assumptions. Subnational data are incorporated with a lag of up to two years; general government data are thus finalized well after central government data. IMF and Indian presentations differ, particularly regarding divestment and license auction proceeds, net versus gross recording of revenues in certain minor categories, and some public sector lending.

Indonesia. The 2011 central government deficit was lower than expected (1.1 percent of GDP), reflecting underspending, particularly on public investment. The 2012 central government deficit is estimated at 1.0 percent of GDP, lower than the revised budget estimate of 1.5 percent of GDP. This reflects current plans of raising domestic fuel prices by 33 percent. However, as the system of fuel subsidies remains unchanged, increasing oil prices will have a negative budgetary impact in the absence of a comprehensive fuel subsidy reform. The low projected budget deficit also reflects ongoing budget execution problems. Fiscal projections for 2013–17 are built around key policy reforms needed to support economic growth—namely, enhancing budget implementation to ensure fiscal policy effectiveness, reducing energy subsidies through gradual administrative price increases, and continuous revenue mobilization efforts to create room for infrastructure development.

Ireland. Fiscal projections are based on the 2012 budget and €12.4 billion in consolidation effort over 2012–15 committed to in the Medium-Term Fiscal Statement (published in November 2011). The fiscal projections are adjusted for differences between the macroeconomic projections of the IMF staff and those of the Irish authorities.

Italy. Fiscal projections incorporate the impact of the government’s announced fiscal adjustment package (July 2010 measures covering 2011–13; July–August 2011 measures covering 2011–14; and December 2011 measures covering 2012–14). Estimates for 2011 are preliminary. The IMF staff projections are based on the authorities’ estimates of the policy scenario (as derived, in part, by the IMF staff), including the above-mentioned medium-term fiscal consolidation packages, and adjusted mainly for differences in macroeconomic assumptions and for less optimistic assumptions concerning the impact of revenue administration measures. After 2014, a constant cyclically adjusted primary balance net of one-time items is assumed.

Japan. Projections include fiscal measures already announced by the government (except for consumption tax increases) and gross earthquake reconstruction spending. The medium-term projections assume that expenditure and revenue of the general government are adjusted in line with current underlying demographic and economic trends (excluding fiscal stimulus and reconstruction spending).

Korea, Republic of. Fiscal projections assume that fiscal policies will be implemented in 2012 as announced by the government. Projections of expenditure for 2012 are in line with the budget. Revenue projections reflect the IMF staff’s macroeconomic assumptions, adjusted for discretionary revenue-raising measures included in the 2009–11 tax revision plans. The medium-term projections assume that the government will continue with its fiscal consolidation plans and balance the budget (excluding social security funds) by 2013, consistent with the government’s medium-term goal.

Mexico. Fiscal projections for 2012 are broadly in line with the approved budget, and projections for 2013 onward assume compliance with the balanced budget rule.

Netherlands. Fiscal projections for 2011–15 are based on the authorities’ Bureau for Economic Policy Analysis budget projections, after adjusting for differences in macroeconomic assumptions. For 2016–17, projections assume that fiscal consolidation continues at the same pace as in 2015.

New Zealand. Fiscal projections are based on the authorities’ 2011 budget and IMF staff estimates. The New Zealand fiscal accounts switched to New Zealand International Financial Reporting Standards in budget year 2007/08. Backdated data have been released back to 1997.

Portugal. Projections reflect, for 2012–13, the authorities’ commitments under the EU/IMF-supported program, and afterward, the IMF staff’s projections.

Russian Federation. Projections for 2012–14 are based on the non-oil deficit in percent of GDP implied by the 2012–14 medium-term budget, and on the IMF staff’s revenue projections. The IMF staff assumes an unchanged non-oil federal government balance in percent of GDP during 2015–17.

Saudi Arabia. The authorities base their budget on a conservative assumption for oil prices with adjustments to expenditure allocations considered in the event that revenues exceed budgeted amounts. IMF staff projections of oil revenues are based on WEO baseline oil prices discounted by approximately 5 percent, reflecting the higher sulfur content in Saudi crude oil. On the expenditure side, wages are assumed to rise at a natural rate of increase in the medium term, with adjustments for recently announced changes in the wage structure. In 2013 and 2016, 13th-month pay is awarded based on the lunar calendar. Transfers increased in 2011, primarily due to a one-time transfer to specialized credit institutions. Interest payments are projected to decline in line with the authorities’ policy of reducing the outstanding stock of public debt. Capital spending is in line with the priorities established in the authorities’ Ninth Development Plan, and recently announced capital spending on housing is assumed to start in 2012 and continue over the medium term.

Singapore. For fiscal year 2012/13, projections are based on budget numbers. For the remainder of the projection period, the IMF staff assumes unchanged policies.

South Africa. Fiscal projections are based on the authorities’ 2012 budget and policy intentions stated in the Budget Review, published February 22, 2012.

Spain. The 2011 numbers are the authorities’ estimated outturns for the general government for the year. For 2012 and beyond, the projections are based on the measures implemented during the course of 2012 and the authorities’ deficit target for 2012. The draft budget for 2012 was not available at the time of the IMF staff’s forecast.

Sweden. Fiscal projections for 2012 are broadly in line with the authorities’ projections. The impact of cyclical developments on the fiscal accounts is calculated using the Organization for Economic Cooperation and Development’s latest semielasticity.

Switzerland. Projections for 2010–17 are based on IMF staff calculations, which incorporate measures to restore balance in the federal accounts and strengthen social security finances.

Turkey. Fiscal projections assume that current expenditures will be in line with the authorities’ 2012–14 Medium-Term Program (MTP), but that capital expenditures will exceed those specified in the MTP, given projects initiated in 2011.

United Kingdom. Fiscal projections are based on the authorities’ 2012 budget announced in March 2012 and the Economic and Fiscal Outlook by the Office for Budget Responsibility published along with the budget. These projections incorporate the announced medium-term consolidation plans from 2012 onward. The projections are adjusted for differences in forecasts of macroeconomic and financial variables and exclude the temporary effects of financial sector interventions and the effect on public sector net investment in 2012–13 of transferring assets from the Royal Mail Pension Plan to the public sector.

United States. Fiscal projections are based on the January 2012 Congressional Budget Office baseline adjusted for the IMF staff’s policy and macroeconomic assumptions. Key near-term policy assumptions include a continuation of the payroll tax cut during 2012, an extension of emergency unemployment benefits into 2013 (one year beyond the current law), and an automatic sequestration of spending from 2013 triggered by the failure of the Joint Select Committee on Deficit Reduction. In the medium term, the IMF staff assumes that Congress will continue to make regular adjustments to the alternative minimum tax parameters and Medicare payments (DocFix), will extend certain traditional programs (such as the research and development tax credit), and will exend the Bush tax cuts for the middle class permanently, but allow those for higher-income taxpayers to expire in 2014 (one year later than planned under the current law). Fiscal projections are adjusted to reflect the IMF staff’s forecasts of key macroeconomic and financial variables and different accounting treatment of financial sector support and are converted to the general government basis.

Data and Conventions

Country-specific data and projections for key fiscal variables are based on the April 2012 WEO, unless indicated otherwise. Where the Fiscal Monitor includes additional fiscal data and projections not covered by the WEO, data sources are listed in the respective tables and figures. All fiscal data refer to the general government where available and to calendar years, with the exception of those for Hong Kong SAR, Pakistan, Singapore, and Thailand, which refer to the fiscal year.

Composite data for country groups are weighted averages of individual-country data, unless otherwise specified. Data are weighted by GDP valued at purchasing power parity as a share of the group GDP. Annual weights are assumed for all years.

For most countries, fiscal data follow the IMF’s Government Finance Statistics Manual (GFSM) 2001. The concept of overall fiscal balance refers to net lending (+)/borrowing (–) of the general government. In some cases, however, the overall balance refers to total revenue and grants minus total expenditure and net lending.

Data on financial sector support measures are based on the database on public interventions in the financial system compiled by the IMF’s Fiscal Affairs and Monetary and Capital Markets Departments, revised following a survey of the G-20 economies. Survey questionnaires were sent to all G-20 members in early December 2009 so that IMF staff estimates of financial sector support could be reviewed and updated. This information was later completed using national sources and data provided by the authorities. For each type of support, data were compiled for the amounts actually utilized and recovered to date. The period covered is June 2007 to the latest available.

The following symbols have been used throughout this volume:

  • … to indicate that data are not available;

  • — to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;

  • – between years or months (for example, 2008–09 or January–June) to indicate the years or months covered, including the beginning and ending years or months;

  • / between years (for example, 2008/09) to indicate a fiscal or financial year.

“Billion” means a thousand million; “trillion” means a thousand billion.

“Basis points” refer to hundredths of 1 percentage point (for example, 25 basis points are equivalent to 1/4 of 1 percentage point).

“n.a.” means not applicable.

Minor discrepancies between constituent figures and totals are due to rounding.

As used in this volume the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.

Additional country information follows, including for cases in which reported fiscal aggregates in the Monitor differ from those reported in the WEO:

Argentina. Total expenditures, total revenues, the primary balance, and the overall balance are consolidated at the general government level and thus aggregate both federal and provinces’ fiscal outcomes. Total expenditure and the overall balance account for cash interest and the IMF staff’s estimate of accrued interest payments. Accrued interest corresponds to adjustment on the stock of CPI-indexed debt using official inflation, interest capitalization, and interest arrears on defaulted-upon debt. The cyclically adjusted and structural balances are defined at the federal level. Calculations use Argentina’s official GDP and consumer price index (the Consumer Price Index for Greater Buenos Aires, or CPI-GBA) data. The IMF has called on Argentina to adopt remedial measures to address the quality of the official GDP and CPI-GBA data. The IMF staff is also using alternative measures of GDP growth and inflation for macroeconomic surveillance, including data produced by private analysts, which have shown significantly lower real GDP growth than the official data since 2008, and data produced by provincial statistical offices and private analysts, which have shown considerably higher inflation figures than the official data since 2007.

Australia. Fiscal data are on a cash basis.

Brazil. Fiscal data are for the nonfinancial public sector.

Chile. Cyclically adjusted balances reflect additional adjustments for commodity price developments.

China. Fiscal data exclude allocation to the stabilization fund. Until 2009, debt data cover only the central government. From 2010, they cover the general government. Public debt projections assume that about 60 percent of the stock of local governments’ debt will be amortized over 2011–13, 16 percent over 2014–15, and 24 percent beyond 2016, consistent with the authorities’ plans.

Colombia. Nonfinancial public sector reported for revenue, expenditures, and balances (excluding statistical discrepancies); combined public sector including Ecopetrol and excluding Banco de la República’s outstanding external debt reported for gross public debt.

Hong Kong SAR. Data are on a fiscal year rather than a calendar year basis. Cyclically adjusted balances reflect additional adjustments for land revenue and investment income.

Hungary. The cyclically adjusted balance and cyclically adjusted primary balance for 2011 exclude one-off revenues estimated at 10.8 percent of GDP (10.3 percent of potential GDP) as per asset transfer to the general government due to changes to the pension system.

Ireland. The general government balances for 2009 and 2010 reflect the impact of banking support measures. The fiscal balance estimates excluding these measures are –11.7 percent of GDP for 2009 and −11.5 percent of GDP for 2010.

Korea, Republic of. Fiscal data are for the central government, except debt data, which are for the general government.

Latvia. The fiscal deficit includes bank restructuring costs and thus is higher than the deficit recorded in official statistics.

Mexico. The general government data reported in the tables cover central government, social security, public enterprises, development banks, the national insurance corporation, and the National Infrastructure Fund but exclude subnational governments.

Norway. Cyclically adjusted balances correspond to the cyclically adjusted non-oil overall or primary balance. Ratios for these variables are in percent of non-oil potential GDP.

Pakistan. Data are on a fiscal year rather than a calendar year basis.

Peru. Cyclically adjusted balances reflect additional adjustments for commodity price developments.

Philippines. Fiscal data are for the central government.

Singapore. Data are on a fiscal year rather than a calendar year basis.

Sweden. Cyclically adjusted balances take into account the output and employment gaps.

Switzerland. Data submissions at the cantonal and commune level are received with a long and variable lag and are subject to sizable revisions. Cyclically adjusted balances reflect additional adjustments for extraordinary operations related to the banking sector.

Thailand. Data are on a fiscal year rather than a calendar year basis.

Turkey. Information on general government balance, primary balance, and cyclically adjusted primary balance differ from those published in the authorities’ official statistics or country reports, which still include net lending. An additional difference from the authorities’ official statistics is the exclusion of privatization receipts in staff projections.

Economy Groupings

The following groupings of economies are used in the Fiscal Monitor.

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The G-20 includes 19 member countries plus the European Union.

Statistical Table 1.

General Government Balance

(Percent of GDP)

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Source: IMF staff estimates and projections. Projections are based on staff assessment of current policies (see “Fiscal Policy Assumptions” in text).Note: For country-specific details, see “Data and Conventions” in text.
Statistical Table 2.

General Government Primary Balance

(Percent of GDP)

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Source: IMF staff estimates and projections. Projections are based on staff assessment of current policies (see “Fiscal Policy Assumptions” in text).Note: Primary balance is defined as the overall balance excluding net interest payments. For country-specific details, see “Data and Conventions” in text.
Statistical Table 3.

General Government Cyclically Adjusted Overall Balance

(Percent of potential GDP)

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Source: IMF staff estimates and projections. Projections are based on staff assessment of current policies (see “Fiscal Policy Assumptions” in text).Note: For country-specific details, see “Data and Conventions” in text.

Cyclically adjusted overall balance excluding financial sector support.