Cyclicality of Revenue and Structural Balances in South Africa

Author/Editor: Aydin, Burcu
Publication Date: September 01, 2010
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: This paper applies a disaggregated method for the calculation of the cyclical component of the budget balance for South Africa with an emphasis on the effect of commodity and asset prices, and credit cycle. Results show that the cyclicality of tax revenue is mostly explained by the variations in tax bases. Change in the credit to private sector also has some affect on the revenue performance; however, asset and commodity prices are not significant in explaining the deviation of revenue from its trend. Nonetheless, quantitative effects of these prices are subject to assumptions used for long-run price levels.
Series: Working Paper No. 10/216
Subject(s): Asset prices | Bank credit | Budgets | Business cycles | Commodity prices | Credit expansion | Economic models | Exports | Mining sector | Private sector | South Africa | Tax bases | Tax collection | Tax revenues

Author's Keyword(s): South Africa | structural balance | credit growth | commodity and asset prices
Publication Date: September 01, 2010
Format: Paper
Stock No: WPIEA2010216 Pages: 24
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