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Fiscal Monitor
Public Expenditure Reform: Making Difficult Choices
April 2014
Fiscal risks are abating somewhat but remain elevated. In advanced economies, recent policy moves have broadly stabilized public debt ratios, but medium-term prospects are still uncertain and debt remains at historic highs. Fiscal vulnerabilities are rising in both emerging market economies and low-income countries, although in most cases from relatively moderate levels. Across country groups, fiscal policy should aim at rebuilding policy space while strengthening the recovery and long-term growth prospects.
| Advanced Economies: A Slowdown, Not a Pause, in Fiscal Consolidation | |||
| Emerging Market Economies: Rising Vulnerabilities—A Call for Policy Action | |||
| Low-Income Countries: Resilient, Yet Fiscally Vulnerable | |||
| References |
| Boxes | |||
| 1.1 | Moment of Truth: Unfunded Pension Liabilities and Public Debt Statistics | ||
| 1.2 | Non-resident Holdings of Emerging Market Economy Debt | ||
| 1.3 | Fiscal Challenges in the Pacific Island Countries | ||
| Figures | |||
| 1.1 | Revisions to Primary Balance and Debt-to-GDP Forecasts Since the Last Fiscal Monitor | ||
| 1.2 | Fiscal Trends in Advanced Economies | ||
| 1.3 | Fiscal Trends in Emerging Market Economies | ||
| 1.4 | Fiscal Trends in Low-Income Countries | ||
| Tables | |||
| 1.1 | Fiscal Balances, 2008–15 | ||
| 1.2 | General Government Debt, 2008–15 | ||
| 1.3 | Assessment of Underlying Fiscal Vulnerabilities over Time | ||
| 1.4 | Assessment of Underlying Fiscal Vulnerabilities, April 2014 | ||
| 1.5 | Selected Advanced Economies: Gross Financing Needs, 2014-16 | ||
| 1.6 | Selected Advanced Economies: Financial Sector Support | ||
| 1.7 | Selected Emerging Market Economies: Gross Financing Needs, 2014–15 | ||
| Past and Expected Spending Trends | |||
| Options for Spending Reforms | |||
| Supportive Institutional Arrangements | |||
| Appendix 2.1 Expenditure Rules: Effective Tools for Sound Fiscal Policy | |||
| References |
| Boxes | |||
| 2.1 | The Future of the State: Testing the Wagner and Baumol Hypotheses | ||
| 2.2 | Structural Measures and Social Dialogue | ||
| 2.3 | Health System Inefficiencies | ||
| 2.4 | Fiscal Consolidations with Progressive Measures | ||
| Figures | |||
| 2.1 | General Government Expenditure | ||
| 2.2 | Change in Primary Expenditure Items, 2009–13 | ||
| 2.3 | Key Facts About the General Government Wage Bill, Employment, and Average Wage, 2010 | ||
| 2.4 | Comparison of Recent (2009–12) and Historical (1979–2009) Wage Bill Condolidation Episodes | ||
| 2.5 | Cumulative Change in the Public Wage Bill Ten Years after the First Year of Measures | ||
| 2.6 | Reform Options to Stablize Pension Spending in Advanced Economies, 2013–30 | ||
| 2.7 | Health Expenditure by Country Group | ||
| 2.8 | Decomposition of Changes in Education Spending | ||
| 2.9 | Redistributive Impact of Fiscal Policy in Advanced Economies, Mid-2000s | ||
| 2.10 | Tax Revenue and Social Spending, 2011 | ||
| 2.11 | Means-tested and Non-means-tested Family Benefits, 2010 | ||
| 2.12 | Social Assistance Coverage and Targeting in Developing Economies, Mid-2000s | ||
| 2.13 | General Government Investment | ||
| 2.14 | Public Capital Stock Ratio | ||
| 2.15 | Public Investment and Capital Stock—Three Quality Scenarios | ||
| 2.16 | Indicators of Expenditure Decentralization | ||
| 2.17 | Subnational Government Expenditure by Function | ||
| 2.18 | Vertical Fiscal Imbalance and Fiscal Performance, 2008 | ||
| 2.19 | Compliance with Fiscal Rules: 1985–2012 | ||
| 2.20 | Compliance with Expenditure Rules and the Macroeconomic Environment | ||
| 2.21 | Presence of Expenditure Rules and Adjusted Primary Balance | ||
| 2.22 | Fiscal Impulse | ||
| 2.23 | Expenditure Rules and Spending Composition | ||
| 2.24 | Expenditure Rules, Efficiency, and Government Size | ||
| Data and Conventions | |||
| Fiscal Policy Assumptions | |||
| Table A. Advanced Economies: Definition and Coverage of Fiscal Monitor Data | |||
| Table B. Emerging Market Economies: Definition and Coverage of Fiscal Monitor Data | |||
| Table C. Low-Income Countries: Definition and Coverage of Fiscal Monitor Data |
| Statistical Tables | |||
| 1. | Advanced Economies: General Government Overall Balance and Primary Balance | ||
| 2. | Advanced Economies: General Government Cyclically Adjusted Balance and Cyclically Adjusted Primary Balance | ||
| 3. | Advanced Economies: General Government Revenue and Expenditure | ||
| 4. | Advanced Economies: General Government Gross Debt and Net Debt | ||
| 5. | Emerging Market Economies: General Government Overall Balance and Primary Balance | ||
| 6. | Emerging Market Economies: General Government Cyclically Adjusted Balance and Cyclically Adjusted Primary Balance | ||
| 7. | Emerging Market Economies: General Government Revenue and Expenditure | ||
| 8. | Emerging Market Economies: General Government Gross Debt and Net Debt | ||
| 9. | Low-Income Countries: General Government Overall Balance and Primary Balance | ||
| 10. | Low-Income Countries: General Government Revenue and Expenditure | ||
| 11. | Low-Income Countries: General Government Gross Debt and Net Debt | ||
| 12a. | Advanced Economies: Structural Fiscal Indicators | ||
| 12b. | Emerging Market Economies: Structural Fiscal Indicators | ||
| 13a. | Advanced Economies: Illustrative Adjustment Needs Based on Long-Term Debt Targets | ||
| 13b. | Advanced Economies: Illustrative Adjustment Needs Based on Medium-Term Structural Balance Targets | ||
| 14. | Emerging Market Economies: Illustrative Adjustment Needs Based on Long-Term Debt Targets | ||
| IMF Executive Board Discussion Summary | |||
| Acronyms | |||
| Country Abbreviations | |||
| Glossary |
