Cover IMF Working Papers
Guarding Against Fiscal Risks in Hong Kong SAR
Author:
International Monetary Fund
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Series:
IMF Working Papers
Volume/Issue:
Volume 2007: Issue 150
Language:
English
Publication Date:
01 Jul 2007
DOI:
https://doi.org/10.5089/9781451867145.001
ISBN:
9781451867145
ISSN:
1018-5941
Pages:
19
Keywords:
WP; revenue; revenue volatility; GDP; spending
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Hong Kong SAR's government faces the dual challenges of volatile revenue and medium term spending pressures arising from a rapidly aging population. Age-related spending pressures raise long-run sustainability concerns, while revenue volatility creates risks to service provision, possibly entailing sudden tax changes, or even requiring new borrowing. After describing the risks associated with aging, the paper uses value at risk techniques to measure the value of the unanticipated risks posed by volatile revenue. The paper also describes the self-insurance value of Hong Kong SAR's traditionally high fiscal savings (reserves), and the impact alternate policy choices could have on revenue volatility.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2007: Issue 150