## htnea2024005 ## Source details **Canonical URL:** [htnea2024005](https://www.imf.org/-/media/files/publications/howtonotes/2024/english/htnea2024005.pdf) ## Other formats - [Markdown version](/-/media/files/publications/howtonotes/2024/english/htnea2024005.pdf.md) - [Structured JSON version](/-/media/files/publications/howtonotes/2024/english/htnea2024005.pdf.json) --- ### Purpose, role, and objectives of an MTFF - MTFFs aim to promote fiscal discipline and sustainability, transparency, and better-informed fiscal decisions. - An MTFF comprises institutional arrangements for prioritizing, presenting, reporting, and managing fiscal aggregates—revenue, expenditure, balance, and debt—generally over a three-to-five-year period. - Key components: - a fiscal strategy; - medium-term projections of key macroeconomic variables and fiscal aggregates; - ceilings on total expenditure to guide subsequent annual budgets. - MTFFs clarify impacts, trade-offs, and risks of policy choices and enhance transparency and accountability. - Stated benefits: - promoting fiscal discipline and fiscal sustainability; - enhancing resource allocation and planning; - improving transparency and accountability by communicating medium-term fiscal goals, policies, and fiscal performance. - Notable numeric references preserved exactly: - MTFF time horizon: three-to-five-year period (also referenced as 3-5 years). - There were 72 MTFFs worldwide by 2013. - In 2021, about 105 countries had at least one fiscal rule. - EU limits cited: general government debt at 60 percent of GDP and deficit at 3 percent. ### Operational role and core components - Role in budget cycle: - MTFF should be the first step in annual budget preparation and produce the total expenditure ceiling consistent with medium-term resources and fiscal objectives. - Establish the total expenditure ceiling early and obtain high-level political agreement; ceilings cascade from total to sector/ministerial allocations. - MTFF typically provides the starting position (outer year forward estimates) for the next year’s budget and is systematically updated for budget-year decisions. - Main components: - Medium-term projections for key macro variables and fiscal aggregates (revenue, expenditure, debt, deficit), including GDP growth, inflation, exchange rates, interest rates, commodity prices and employment. - Projections must be realistic, accurate, internally consistent, and disclose key assumptions. - Baseline revenue projections based on existing tax policies; baseline expenditure projections based on existing expenditure policies (assuming no policy change). - Fiscal strategy: - States fiscal objectives and targets over a 3-to-5-year period and includes the ceiling on total expenditure for the annual budget (binding for the first projection year; can be indicative for outer years). - Explains compliance with fiscal rules and medium-term revenue strategy details if available. - Comprehensive fiscal risk assessment: - Quantitative analysis of macroeconomic risks (sensitivity analysis, alternative scenarios, fan charts) at a minimum. - Quantification recommended for most probable and high-impact events; debt sustainability analysis is recommended. - Publication practice: - MTFF typically embedded in a fiscal strategy report (FSR); country labels vary. ### Design considerations and choices - Coverage options: - central government, general government, nonfinancial public sector. Match coverage with fiscal rules/objectives and available data. - EU fiscal rules cover general government—this should be minimum coverage for member countries’ MTFFs. - Time horizon: - Typical projection horizon ranges are 3 to 5 years. - Frequency of revision: - Balance flexibility and credibility; usual practice: formally update MTFF twice a year—at the start of the budget cycle and again if macro conditions change before budget submission. If updated before submission, explain reasons for changes. - Fixed vs rolling frameworks: - Fixed plan remains unchanged for the period; rolling plan adds a new year annually. - Rolling frameworks more common; only six OECD countries reported using fixed frameworks (Moretti 2023). - Expenditure limits: - Top-down limit on total expenditures early; first budget year usually binding; policymakers decide whether outer year limits are binding or indicative. - Twelve OECD countries have binding ceilings for the budget year plus outer years (Moretti 2023). - Consider reserve margin/contingency to manage uncertainty (example: Sweden uses safety margins based on historical averages). - Common exclusions: non-discretionary expenditure (interest spending), automatic stabilizers, highly volatile items. - Nominal vs real ceilings: - Most countries set expenditure ceilings in nominal terms. - Real-term ceilings less common; real ceilings accommodate inflation surprises but may entrench inflation; safety margins mitigate inflation shocks. - Real ceilings relatively more common in EMEs due to higher inflation volatility. ### Implementation challenges and behavioral/institutional barriers - Key challenge sources: - political and behavioral factors; - weak linkage between MTFF and annual budget/MTBF; - inaccurate/unrealistic projections and forecast bias; - uncertainty and lack of basic PFM systems; - weak institutional and coordination capacity. - Dependence on a credible annual budget: - It is not possible to have an MTFF without an annual budget. - Some countries, especially LIDCs, struggle to have an annual budget in place, impeding medium-term focus. - Political and behavioral barriers: - Shifting from annual to medium-term focus requires behavioral changes by politicians and civil servants; short-term political cycles can dominate allocation decisions. - Integration issues: - Ensuring top-down total expenditure ceiling affects budget preparation across spending entities is challenging; failures arise from weak strategic decision-making and unreconciled top-down and bottom-up estimates. - Forecast bias mitigation: - Publish assumptions and projection accuracy, compare with independent/private forecasters, establish independent fiscal councils/institutions. - By 2021, 49 countries had fiscal councils (Davoodi 2022). - Data and capacity constraints: - Incomplete or outdated data, weak forecasting tools, poor coordination in information sharing—more acute in LIDCs. - Dealing with uncertainty: - Incorporate scenarios/sensitivity tests; use implicit conservative projections or explicit reserves. - Study estimate for advanced economies: reserve typically about 1 percent of total expenditure for the budget year and increases to between 1.5 to 3 percent in forward years (Harris and other 2013). - Establish rules on reserve use to improve transparency and prevent continual drawdown. ### Institutional and legal arrangements for credibility and continuity - Legal basis: - A robust legal/regulatory framework compels preparation and regular updates and gives MTFFs a legal status for parliamentary debate and accountability. - Legal vehicles: General PFM law (including organic budget laws) or a Fiscal Responsibility Law (FRL). Choice depends on legal traditions; neither is inherently superior. - Legislative level should set overarching MTFF principles; secondary legislation can specify operational details for flexibility. - FAD Survey (2023) table of MTFF specifications in legal frameworks (percentages preserved exactly): - Calendar for preparing MTFF: 74% Yes, 26% No - Requirement and timeline for publishing MTFF: 95% Yes, 5% No - Frequency of updates to MTFF: 36% Yes, 64% No - Coverage of MTFF (Central Government, General Government, Public Sector): 95% Yes, 5% No - Requirement to present MTFF to Parliament for information or approval: 59% Yes, 41% No - The entities involved in preparing the MTFF: 65% Yes, 35% No - Institutional arrangements: - A dedicated Macro-Fiscal Unit (MFU) typically leads technical MTFF work: coordinates macro and fiscal projections, fiscal-risk assessment, and proposes objectives/targets. - MFU should coordinate with Budget Directorate, revenue agencies, non-tax revenue agencies, and Public Debt Management Office. - Coordination can be bilateral or via a macro-fiscal working group; formalized calendars and manuals promote clarity. - Cabinet/Council of Ministers approval of fiscal objectives/targets, MTFF, aggregate expenditure ceiling, and FSR secures political commitment. - Fiscal Policy Committees (examples: Thailand, Malaysia) can engage top political leadership; Malaysia’s committee is chaired by the Prime Minister and supported by a Treasury Secretariat. - Timing and publication: - MTFF should be prepared/published several months before the Executive’s Budget Proposal and before sectoral ceilings are provided. - Examples: WAEMU/CEMAC expect MTFF by end of June with budget proposal in early October; Euro area SP/CPs submitted by 30 April (new Regulation to replace SPs/CPs with medium-term fiscal-structural plans). ### Technical arrangements, tools, and good practice for MTFF spreadsheets - Tool choice and openness: - Prefer openness of spreadsheets over ‘closed’ bespoke software; spreadsheets follow “inputs – calculations – outputs” and foster understanding and ownership. - Single-source consistency: - Only one set of GDP, inflation, exchange rate and external forecasts should be included and used consistently across the tool. - Basic spreadsheet architecture (inputs, calculations, outputs): - Input sheets: historical data and macro forecasts. - Calculations sheets: formulas producing projections; separate baseline forecast from policy scenarios. - Output sheets: formatted tables and charts for reports. - Six stages of a basic MTFF projection tool (stages preserved exactly as in source): - Stage 1: Forecasting baseline revenues (Government revenues (tax and non-tax); Grants from development partners) - Stage 2: Forecasting baseline expenditures (Wages and Salaries; Use of Goods and Services (including operations and routine maintenance spending); Subsidies and current transfers; Capital expenditure) - Stage 3: Forecasting the debt stock and interest payments (Net borrowing (target) and the debt stock; Scheduled repayments of existing debts; Interest payments (linked to the debt stock)) - Stage 4: Fiscal balance and Financing (Primary and overall fiscal balance or borrowing needs; Sources of financing for new borrowing) - Stage 5: Policy scenario (Calculated as the difference between the baseline revenue and baseline expenditure compared to the agreed deficit and expenditure ceilings; Iteration for new policies and new capital projects to calculate the policy scenario; Compare to the debt limit and iterate; Alternatively save and build buffers) - Stage 6: Realism assessment and risk analysis (Assess plausibility of forecasts—especially gross financing and borrowing ability; Risk analysis—sensitivity analysis and scenario analysis for adverse shocks such as lower growth, higher inflation, higher interest rates) - Design and sustainability: - Size/complexity should reflect capacity and staff turnover; institutionalization via training, user manuals, narrated recordings, cell notes and documentation mitigates knowledge loss. - Rolling the tool to the next financial year is challenging and should be documented. - IMF online training available via IMFx on edX. ### Annex: Practical guidance and examples from Annex 3 - Historical forecast error analysis: - Two error measures: Mean average error: (∑ (y_i − x_i) / n). Mean absolute error: (∑ |y_i − x_i| / n). - Threshold example: mean average error "Significantly different from zero (for example, > 0.5% of GDP)" indicates systematic bias. - Stage 1 (Revenue): focus on five most significant large-and-difficult-to-forecast revenue items; methods for grants include risk-adjusted likelihood approach with example table (headline and risk-adjusted grant values preserved exactly): - Grant 1: Likelihood 0.5; 2023/24 50.0 2024/25 50.0 2025/26 50.0 → Risk adjusted 25.0 25.0 25.0 - Grant 2: Likelihood 0.25; 2023/24 65.0 2024/25 80.0 2025/26 80.0 → Risk adjusted 16.3 20.0 20.0 - Grant 3: Likelihood 0.75; 2023/24 30.0 2024/25 30.0 2025/26 30.0 → Risk adjusted 22.5 22.5 22.5 - Grant 4: Likelihood 0.75; 2023/24 25.0 2024/25 25.0 2025/26 25.0 → Risk adjusted 18.8 18.8 18.8 - Grant 5: Likelihood 1; 2023/24 45.0 2024/25 45.0 2025/26 0.0 → Risk adjusted 45.0 45.0 0.0 - Total grants headline: 215.0 230.0 185.0 → Total risk adjusted: 127.5 131.3 86.3 - Stage 2 (Expenditure): baseline methods and examples: - Wages and Salaries example: = 100,000 = 100,000 * (1-0.01) * (1+ 0.03) = 101,970 - Use of Goods and Services example: = 50,000 = 50,000 * (1+0.013) * (1+0.08) = 54,702 - Subsidies and transfers example: = 30,000 = 30,000 * (1+0.013) * (1+0.15) = 34,948 - Capital spending example table (values preserved exactly): - BY BY+1 BY+2 BY+3 BY+4 BY+5 - Capital spending: 500 520 540 560 580 600 - Ongoing projects: 350 240 200 140 30 5 - New projects: 150 280 340 420 550 595 - O&M R coefficients (percentages preserved exactly, Average column shown): - Agriculture: ADB 2.3% World Bank 4.7% Average 3.5% - Education: ADB 2.9% World Bank 7.4% Average 5.2% - Energy: ADB 4.7% World Bank 1.3% Average 3.0% - Environment: ADB 7.4% World Bank 1.7% Average 4.6% - Health: ADB 7.3% World Bank 3.0% Average 5.2% - Telecommunications: ADB 4.3% World Bank 0.3% Average 2.3% - Transportation: ADB 1.9% World Bank 2.5% Average 2.2% - Urban Development: ADB 1.6% World Bank 1.7% Average 1.7% - Water supply/sanitation: ADB 5.4% World Bank 4.4% Average 4.9% - Average all sectors (weighted): ADB 4.3% World Bank 3.5% Average 3.9% - Stage 3 (Debt and interest): debt_stock_BY = debt_stock_BY-1 + net_borrowing_BY; recommend subdividing debt by domestic/foreign and accounting for exchange rate assumptions; interest payments = debt_stock_BY * average interest_rate_BY. - Stage 4 (Financing): net financing should equal the fiscal deficit; sign conventions should match budget documents. - Stage 5 (Policy scenario and balancing): policy scenario = baseline difference vs agreed targets; balancing items should be under government control; assess realism of residuals and iterate with feedback loops to GDP. - Stage 6 (Realism and risk): realism assessments, sensitivity analysis (e.g., ±1 percentage point) and scenario analysis (best/worst case) to inform a Fiscal Risk Statement. - Practical resources: - IMF free online training on fiscal forecasting (IMFx on edx.org/school/imfx) with relevant modules listed in source. ### Select country practices and institutional lessons (high-level highlights) - Chile: MTFF based on a structural balance rule; MoF publishes quarterly updates; four-year projections with indicative outer-year expenditure ceilings complemented by expenditure baselines. - Colombia: legally mandated long-horizon MTFF (10 years since 2003; 2023 MTFF covered 2023-34) with an independent fiscal council providing technical opinions and fiscal risk analysis; debt limit 71 percent of GDP and debt anchor 55 percent of GDP (post-2021 revisions). - Costa Rica: top-down MTFF for the central government in 2021, extended to the Non-Finance Public Sector in 2022; published in March/April and updated in August/September; includes 5-year projections and fiscal risk analysis. - Poland: MTFF embodied in the EU Convergence Program with medium-term projections and a national stabilizing expenditure rule in law. - South Africa: MTFF elements published in the Medium-Term Budget Policy Statement (MTBPS) 2-3 months before the budget; recognized for budget transparency and MTFF–MTBF coordination. - Thailand: MTFF mandated by the 2018 Fiscal Responsibility Act; Fiscal Policy Committee chaired by the Prime Minister prepares and revises MTFF; MTFF is a rolling plan with at least three outer years. - LIDCs (examples): Rwanda and Uganda include MTFF requirements in PFM laws; procedural approaches and sequencing emphasized for low-capacity contexts. - Selected LIDC examples: - Benin: MTFF included in the Multi-Annual Budgetary and Economic Programming Document; Organic Budget Law (article 59) requires annual production and submission to Parliament before May 30. - Cambodia: MEF building forecasting capacity with IMF TA; working on an MTFF document including a medium-term fiscal anchor. - Uganda: MTFF prepared twice a year; Charter for Fiscal Responsibility commits to deficit rule no more than 3 percent of GDP and a 50 percent of GDP debt ceiling. ### Policy recommendations and pragmatic sequencing - Key prerequisites for effective MTFF implementation: - political commitment; - rules, processes, and procedures supporting sound institutional arrangements; - building technical capacity. - Sequencing and tailoring: - Start with an MTFF projection spreadsheet, build forecasting and analytical capacity, then expand to a detailed MTFF report and consider moving to an MTBF/MTEF once MTFF credibility is established. - Customize design to country context, PFM conditions, and technical/institutional capacity. - Operational recommendations: - Ensure MTFF is prepared and published before budget preparation and sector ceilings distribution. - Secure cabinet/legislative approval of aggregate ceilings and fiscal strategy to reinforce top-down discipline. - Publish assumptions, assess forecast errors, and disclose fiscal risks and contingency use rules. - Institutionalize coordination (MFU, macro-working groups), documentation, and training to sustain frameworks amid staff turnover. *Italic: Source: htnea2024005 (excerpts and synthesis from the provided content unit).* ### 1. Introduction ........................................................................................................ ### 1. Introduction ### Purpose and role of an MTFF - MTFFs aim to promote fiscal discipline and sustainability, transparency, and better-informed fiscal decisions. - An MTFF comprises a set of institutional arrangements for prioritizing, presenting, reporting, and managing fiscal aggregates—revenue, expenditure, balance, and debt—generally over a three-to-five-year period. - Key components of an MTFF include: - a fiscal strategy; - medium-term projections of key macroeconomic variables and fiscal aggregates; - ceilings on total expenditure to guide subsequent annual budgets. - By introducing a medium-term perspective into fiscal and budgetary decision making, MTFFs clarify the impact, trade-offs, and risks of policy choices and enhance transparency and accountability. ### Stated objectives and potential benefits - MTFFs contribute to: - promoting fiscal discipline and fiscal sustainability; - enhancing resource allocation and planning; - improving transparency and accountability by communicating medium-term fiscal goals, policies, and fiscal performance. - MTFFs can bolster confidence in the government’s ability to manage its finances prudently and competently. ### Recent drivers of MTFF adoption and historical context - MTFFs originated in Australia in the 1980s and have seen widespread adoption across countries, regions, and income groups. - There were 72 MTFFs worldwide by 2013. - Adoption has been driven by: - requirements of economic and monetary unions (for example, EU members and unions such as ECCU, WAEMU, CEMAC, and East Africa Economic and Monetary Community); - responses to crises (for example, in parts of Latin America as part of fiscal responsibility reforms); - requirements linked to development loans and programs from multilateral financial institutions. ### Definitions and scope used in this Note - Narrow definition: MTFF as quantitative projections (3-5 years) of macro variables and fiscal aggregates consistent with government fiscal objectives. - Broader definition (used in this Note): MTFF as a structural set of arrangements and procedures for producing and using multi-annual projections, linking projections and reports to budget architecture, actors, procedures, and products involved. - The Note uses the broader definition: an MTFF presents medium-term projections and sets multiyear targets or ceilings consistent with the government’s fiscal objectives, establishing a top-down ceiling on total expenditure as the starting point for annual budgets. ### Common features of MTFFs - Covers a minimum period of the budget year plus two forward years. - Provides multi-year macroeconomic and fiscal forecasts. - Sets objectives or ceilings for fiscal aggregates. - Establishes a top-down limit on total annual expenditure. - Is approved at a high level by the cabinet and/or the Parliament and is published in a report. ### Challenges to effective MTFF implementation - Accurate economic forecasting and timely data are needed. - Political commitment is often lacking. - Failure to link MTFFs with the annual budget process undermines effectiveness. - Annual budgets sometimes do not respect total expenditure ceilings. - Difficulty in dealing with uncertainty necessitates flexibility in MTFF design. - To be effective, MTFFs must be integral to fiscal and budgetary decision making; otherwise they can remain a paper exercise. ### Institutional and design implications (overview) - Effective implementation requires: - political commitment; - rules, processes, and procedures supporting sound institutional arrangements; - building technical capacity. - The Note focuses on MTFFs from a public financial management perspective and does not provide an in-depth discussion on forecasting models or methodologies. - The Note’s structure: - Section 2: MTFF context and components; - Section 3: Key design choices; - Section 4: Main implementation challenges; - Section 5: Institutional and technical arrangements for effective implementation; - Section 6: Country examples by income group; - Conclusion: lessons learned. ### Notable numeric and institutional references preserved exactly as presented - MTFF time horizon: three-to-five-year period (also referenced as 3-5 years). - There were 72 MTFFs worldwide by 2013. - In 2021, about 105 countries had at least one fiscal rule. - EU limits cited: general government debt at 60 percent of GDP and deficit at 3 percent. *IMF | How to Note 2 — How to Develop and Implement a Medium-Term Fiscal Framework (September 2024)* ### Box 4). Based on similar principles, New Zealand’s legislation requires that each newly elected government ### htnea2024005 - Box 4). Based on similar principles, New Zealand’s legislation requires that each newly elected government ### Post-pandemic context and overarching guidance - Post pandemic, many governments are at a crossroads on numerical fiscal rules and are contemplating whether to return to former rules, and at what pace, or to adopt new fiscal rules (IMF 2023a). - The pandemic highlighted shortcomings in existing rules: insufficient flexibility and poorly defined escape clauses, increased complexity, and reduced transparency (Davoodi and others 2022). - There is increased interest in tailoring rules to country context, raising trade-offs between flexibility, credibility, and enforceability. - A greater emphasis on a more risk-based framework is recommended to ensure a pathway to debt sustainability and to build fiscal buffers (Caselli 2022). - This approach reinforces the importance of MTFFs as the tool to set out the government’s medium term fiscal plans. ### Role and operational features of the MTFF - The MTFF works best when there are clearly articulated fiscal objectives and a medium-term strategy to guide the framework. - The MTFF should be the first step in the annual budget preparation process and produces the total expenditure ceiling for the annual budget consistent with medium-term resources and the government’s fiscal objective. - The MTFF: - Estimates whether there is room for new policies or if reductions in spending and/or increases in taxes are required to meet fiscal objectives. - Is enhanced when supported by a MTRS, which outlines the future vision of the tax system and supports revenue projections based on tax policy and revenue administration measures (Gaspar and Toro 2019). - Key operational practice: establish the total expenditure ceiling early in the process to guide the annual budget and obtain high-level political agreement on the expenditure ceiling and broad policy priorities. - Budget priority setting under an MTFF is cascading: total expenditure level determined before allocations between main sectors/ministries. - Costing of new policies must be estimated and assessed relative to medium-term priorities. - Relationship with MTBF/MTEF: - An MTBF requires an MTFF and goes into greater detail, coordinating top-down ceilings with bottom-up estimates from spending ministries. - The MTBF should be reconciled with the MTFF and use a classification similar to the annual budget. - Annual budget process: - Contains detailed annual appropriations and should be consistent with the MTFF (and MTBF, if any). - An updated MTFF is often presented with the budget if macroeconomic conditions change. - Outer year forward estimates are the starting position for the following year’s budget and are systematically updated for budget-year decisions and parameter changes. - Credible annual budget execution supports MTFFs; deviations arise from supplementary budgets, revenue shortfalls, and overspending. Accounting and reporting provide opportunities to reconcile estimates and actuals. ### Main components of an MTFF - Medium-term projections for key macroeconomic variables and main fiscal aggregates (revenue, expenditure, debt, and deficit), including GDP growth, inflation, exchange rates, interest rates, commodity prices and employment. - Projections must be realistic, accurate, internally consistent, and disclose key assumptions. - Baseline revenue projections based on existing tax policies; baseline expenditure projections based on existing expenditure policies (assuming no policy change). - Compare baselines with fiscal objectives, limits or rules to determine room for new policies. - A fiscal strategy that: - States fiscal objectives and targets over a 3-to-5-year period and how policies will contribute to fiscal sustainability and macro-economic stability. - Includes the ceiling on total expenditure for the annual budget (binding for the first projection year; can be indicative for outer years). - Explains compliance with fiscal rules, if applicable, and includes medium-term revenue strategy details if available. - Good practice: publish the fiscal strategy in a report. - A comprehensive fiscal risk assessment: - Quantitative analysis of macroeconomic risks (sensitivity analysis, alternative scenarios, fan charts) at a minimum. - Depending on capacity, quantitative or qualitative analysis of specific risks (public corporations, subnational governments, court rulings, natural disasters, financial crises, PPP projects, guarantees). - Quantification recommended for most probable and high-impact events; if capacity limited, provide qualitative analysis. - Conducting a debt sustainability analysis is recommended. - Objective: integrate fiscal risks into projections before budget preparation and in annual budget documents to allocate fiscal buffers and be transparent about mitigation measures. - MTFF typically embedded in a fiscal strategy report; country labels vary (Pre-budget Report, Fiscal Strategy Paper, MFMP, MMM, Stability Programs, Programación fiscal, Pre-criterios y Criterios, 2022-2028 MTFF Report). - IMF Fiscal Transparency Code and the Public Expenditure Financial Accountability Standards provide guidance on contents. ### Design considerations and choices - Coverage: - Options: central government, general government, nonfinancial public sector. - Ideally comprehensive coverage; match coverage with fiscal rules/objectives and available data. - EU fiscal rules cover general government—this should be minimum coverage for member countries’ MTFFs. - Examples of more comprehensive coverage: Mexico and Peru (nonfinancial public sector). - Middle ground: cover central government and address broader public sector risks via fiscal risk analysis. - MTFF should cover current and capital expenditures, including externally financed public investment. - Time horizon: - Influenced by electoral/planning cycles and monetary union regulations. - Typical projection horizon ranges are 3 to 5 years. - Frequency of revision: - Balance flexibility and credibility; updating too frequently reduces credibility. - Usual practice: formally update MTFF twice a year—at the start of the budget cycle and again if macro conditions change before budget submission. - If updated before submission, explain reasons for changes. - Fixed or rolling framework: - Fixed plan remains unchanged for the period (e.g., four years); rolling plan adds a new year annually. - Fixed offers predictability; rolling offers flexibility. - Rolling frameworks are more common; only six OECD countries reported using fixed frameworks (Moretti 2023). - Examples of fixed frameworks: Netherlands and Finland (four-year fixed framework for each government term). - Expenditure limits: binding or indicative: - Establish top-down limit on total expenditures early and present multi-year expenditure forecasts/limits with executive budget proposal. - Limits for first budget year usually binding when approved; policymakers choose whether outer year limits are binding or indicative. - Twelve OECD countries have binding ceilings for the budget year plus outer years (Moretti 2023). - Consider reserve margin/contingency for uncertainty (e.g., Sweden includes safety margins based on historical averages). - Common exclusions from binding ceilings: non-discretionary expenditure (interest spending), automatic stabilizers, highly volatile items. - Nominal or real terms: - Most countries set expenditure ceilings in nominal terms (easier to convey and monitor). - Real-term ceilings are less common—more complex, less transparent, less predictable. - Nominal ceilings curb excess demand but may imply large cuts in real spending if inflation surprises; real ceilings fully accommodate inflation surprises, potentially entrenching inflation. - Including safety margins can mitigate inflation surprise impacts. - Due to higher inflation volatility, real spending ceilings are relatively more common in EMEs. ### Implementation variation and evolution - MTFF sophistication varies across countries: from basic spreadsheets to sophisticated models. - Effective implementation can vary over time within a country due to political and technical factors (e.g., staff turnover). - IMF FAD 2023 survey informs design choices on coverage, time horizon, and frequency of revision; Annex 1 (survey) presents MTFF contents by income group. ### Challenges in implementing MTFFs - Key challenge sources: political and behavioral factors; weak linkage between MTFF and annual budget/MTBF; inaccurate/unrealistic projections; uncertainty; lack of basic PFM systems; weak institutional and coordination capacity. - Dependence on a credible annual budget: - It is not possible to have an MTFF without an annual budget. - Some countries, especially LIDCs, struggle to have an annual budget in place. - Lack of basic annual PFM systems impedes medium-term focus; credibility issues reflect weak budget preparation and weak execution controls leading to overspending. - Political and behavioral barriers: - Shifting from annual to medium-term focus requires behavioral changes from politicians and civil servants and changes to budget processes. - Short-term political cycles and pressures can dominate resource allocation; commitment to medium-term objectives is required and is harder in politically unstable contexts. - Integration with annual budget and MTBF: - Ensuring top-down total expenditure ceiling affects budget preparation and across spending entities is challenging. - Failures arise from weak strategic decision-making, inadequate allocation processes, disconnects in coverage/consistency between MTFF and MTBF, and unreconciled top-down and bottom-up estimates. - Some countries develop an MTBF without fully establishing an MTFF. - Unrealistic projections and forecast bias: - Overly optimistic assumptions or forecast bias undermine MTFF credibility. - Mitigation: publish assumptions and projection accuracy, compare with independent/private forecasters, establish independent fiscal councils/institutions. - By 2021, 49 countries had fiscal councils (Davoodi 2022); some review/endorse or produce macro-fiscal projections (example given: UK). - External institutions (think-tanks) can aid scrutiny (example given: United States). - Governments should explain in-year adjustments, deviations from prior forecasts, and publish forecast error analyses—often lacking in LIDCs and EMEs. - Data challenges: - Incomplete or outdated data, especially on budget execution, compromises medium-term projections. - Weak forecasting tool capacity and poor coordination in information sharing affect LIDCs more acutely. - Dealing with uncertainty: - Incorporate scenarios or sensitivity tests; focus on macroeconomic risks’ impact on fiscal projections. - Special challenge for countries dependent on uncertain external revenues and resource-rich countries facing commodity price volatility. - Governments adopt implicit (conservative projections) and explicit margins/reserves to manage uncertainty. - Explicit reserves can be included in aggregate ceilings, under ministerial/sector ceilings, or as a general contingency reserve. - Reserve size varies and tends to increase in outer years; one study estimated for advanced economies: reserve typically about 1 percent of total expenditure for the budget year and increases to between 1.5 to 3 percent in forward years (Harris and other 2013). - Challenge: decide reserve size and maintain it amid calls to use resources for emergencies (climate-related and other). - Establish rules on reserve use to improve transparency and prevent continual drawdown. - MTBF complexity: - MTBFs are more complex and take longer to implement than MTFFs due to required detail. - Literature and experience suggest MTFFs have been more widely implemented and have promoted fiscal discipline and enhanced fiscal management (World Bank 2013; Schiavo-Campo 2009). - Effective MTBF implementation requires appropriate institutional arrangements and technical capacity. ### Institutional, technical and capacity responses - Addressing implementation challenges requires: - Political commitment. - Institutional strengthening. - Capacity building. - Effective coordination among stakeholders. - Section 5 (in source) examines how essential institutional and technical arrangements can help address these challenges. *Italic: IMF | How to Note 6 (excerpts from the provided content unit).* ### 5. Institutional and Technical Arrangements for Effective MTFF Implementation ### 5. Institutional and Technical Arrangements for Effective MTFF Implementation ### A. The Legal Basis for an MTFF - A robust legal and regulatory framework provides the necessary authority for MTFF implementation and: - compels authorities to prepare and update the MTFF regularly and ensure continuity beyond political administrations; - gives the MTFF a legal status that allows it to be debated in Parliament, enhancing accountability. - An MTFF may initially be an internal exercise without a dedicated legal basis to allow time to develop capacity or to enable a new government to swiftly outline fiscal policy. - Legal vehicles for mandating MTFF production: - General PFM law (including organic budget laws) or a Fiscal Responsibility Law (FRL). - Choice depends on legal traditions and executive–legislative relationships; neither FRL nor overall PFM legislation is inherently superior. - Adoption of an FRL may attest to a greater level of political ownership of fiscal strategy. - Legislative level should set overarching MTFF principles; secondary legislation can specify operational details to allow flexibility and capacity building. - Example: Côte d’Ivoire—law broadly defines MTFF content; a ministerial decision outlines process and a dedicated committee prepares the MTFF for political approval. - Example: Ecuador—Organic Code of Planning and Public Finance (2020) sets calendar, time horizon and binding first year; regulation sets detailed contents. - Alignment with international standards (Open Budget Survey (OBS), IMF’s Fiscal Transparency Code (FTC), PEFA) is achievable progressively by devolving details to secondary legislation. - Table 1 (FAD Survey, 2023) — MTFF specifications defined in legal frameworks: - Calendar for preparing MTFF: 74% Yes, 26% No - Requirement and timeline for publishing MTFF: 95% Yes, 5% No - Frequency of updates to MTFF: 36% Yes, 64% No - Coverage of MTFF (Central Government, General Government, Public Sector): 95% Yes, 5% No - Requirement to present MTFF to Parliament for information or approval: 59% Yes, 41% No - The entities involved in preparing the MTFF: 65% Yes, 35% No ### B. Institutional Arrangements - MTFF preparation is complex and iterative, requiring both technical expertise (macroeconomic forecasting, fiscal expertise, fiscal-risk assessment) and political ownership. - Main organizational approach: - A dedicated Macro-Fiscal Unit (MFU) typically leads technical MTFF work: coordinates and prepares macroeconomic and fiscal projections, performs impact analysis of fiscal policy and fiscal risks, proposes fiscal objectives/targets in accordance with fiscal rules. - MFU should coordinate between the Budget Directorate and revenue agencies, non-tax revenue agencies, and the Public Debt Management Office. - Alternative arrangements: lead role within Budget Directorate, another MoF unit, Ministry of Economy/Planning; examples include Egypt, Saudi Arabia, Slovakia (MFUs), and Francophone countries where Budget Directorate leads in coordination with macro forecasting services. - Coordination and data sharing: - Can be bilateral or via a macro-fiscal working group led by the macro-fiscal unit. - Example: Côte d’Ivoire’s Programming Committee includes Budget Directorate (lead), General Directorates for Economy, Tax and Customs, Planning and Decentralization, Central Bank, PPP Unit, and main Social Security Funds. - Formalized coordination and a documented calendar/manual promote clarity of roles and required information flows. - Aligning MTFF with the budget cycle and decision making: - MTFF must be prepared and published several months before the Executive’s Budget Proposal and before sectoral budget ceilings are provided. - The Cabinet/Council of Ministers should define and approve fiscal objectives/targets (in line with fiscal rules), the MTFF, the aggregate expenditure ceiling, and the fiscal strategy report (FSR). - Fiscal Policy Committees (e.g., Thailand, Malaysia) can engage top political leadership; Malaysia’s committee is chaired by the Prime Minister and supported by a Treasury Secretariat. - Cabinet/PM approval secures commitment to aggregate fiscal targets and strengthens the MoF’s position in top-down budgeting. - A reserve can be set aside within the initial ceiling for negotiation with spending ministries; major changes to the aggregate ceiling require an explanation in the MTFF update prior to submission to the legislature. - Timing and publication examples: - WAEMU / CEMAC: MTFF expected by end of June; Budget proposal in early October (about three months to distribute ceilings). - Euro area: MTFF report (Stability Program) before end of April; update (Draft Budgetary Plan) in October after budget submission evaluation by the EU Commission. - MTFF updates: - Updates may be needed between initial MTFF and Budget proposal to reflect new developments; traceability of changes is important. - Updating MTFFs within the fiscal year can blur the distinction between a “framework” (normative, point-in-time assumptions) and a “forecast” (reflects all current information). ### C. Technical Arrangements - Multi-year macroeconomic and fiscal forecasts are central to the MTFF; methodologies depend on institutional capacity and data quality. - Common practice: - Spreadsheet-based projection tools are widely used, particularly where data and capacity are limited. - The MTFF spreadsheet integrates historical macroeconomic data, fiscal data, and external forecasts to project fiscal variables two or more years ahead. - Use of government-standard classifications for revenues, expenditure, and financing is important for consistency and stakeholder understanding. - Data and model consistency: - A MTFF spreadsheet is a linked framework: only one set of GDP, inflation, exchange rate and external forecasts should be included and used consistently across the tool. - Over time, feedback loops (e.g., government spending → GDP) can be introduced to improve consistency. - Cross-government coordination ensures consistent source data and assumptions (e.g., Ministry of Planning, Central Bank, MoF). - Basics for MTFF spreadsheet design (Box 2: Inputs, Calculations, Outputs): - “Input” sheets: hard-coded historical data and macro forecasts for macroeconomic assumptions, revenues, expenditures, financing. - “Calculations” sheets: formulas producing projections for revenue, expenditure, financing; separate baseline forecast from policy scenario; iteration between policy impacts and macro variables. - “Output” sheets: formatted tables and charts for reports and presentations. - Emphasis on producing projections for main fiscal aggregates: revenue and expenditure (economic classification), deficit, primary balance, borrowing, and debt. - Six stages of developing a basic MTFF spreadsheet (Table 2): - Stage 1: Forecasting baseline revenues (Government revenues (tax and non-tax); Grants from development partners) - Stage 2: Forecasting baseline expenditures (Wages and Salaries; Use of Goods and Services (including operations and routine maintenance spending); Subsidies and current transfers; Capital expenditure) - Stage 3: Forecasting the debt stock and interest payments (Net borrowing (target) and the debt stock; Scheduled repayments of existing debts; Interest payments (linked to the debt stock)) - Stage 4: Fiscal balance and Financing (Primary and overall fiscal balance or borrowing needs; Sources of financing for new borrowing) - Stage 5: Policy scenario (Calculated as the difference between the baseline revenue and baseline expenditure compared to the agreed deficit and expenditure ceilings; Iteration for new policies and new capital projects to calculate the policy scenario; Compare to the debt limit and iterate; Alternatively save and build buffers) - Stage 6: Realism assessment and risk analysis (Assess plausibility of forecasts—especially gross financing and borrowing ability; Risk analysis—sensitivity analysis and scenario analysis for adverse shocks such as lower growth, higher inflation, higher interest rates) - Guidance on sizing and sustaining MTFF spreadsheets: - Size and complexity should reflect government capacity, staffing, and staff turnover; more staff and lower turnover support greater complexity. - Tradeoff: larger models may increase accuracy but reduce usability and sustainability. - Institutionalization measures: training, user manuals, step-by-step guides, narrated screen recordings, cell notes, and documentation to mitigate institutional memory loss and staff turnover risks. - The most challenging update is rolling the tool to the next financial year—this process should be carefully documented. - Online IMF training on fiscal forecasting is available through IMFx on the edX platform. *Italic: Source: htnea2024005 - 5. Institutional and Technical Arrangements for Effective MTFF Implementation* ### Box 3. Common Technical Features of Successful Frameworks ### Box 3. Common Technical Features of Successful Frameworks ### Technical elements - Prefer openness of spreadsheets over ‘closed’ bespoke software. - Spreadsheets follow an “inputs – calculations – outputs” approach to organize files and make forecasts understandable to new users and a wider audience. - Budget projections are directly linked with the MoF’s chart of accounts or fiscal statistics using a format well understood by senior management and others in government to build traction and understanding. - Frameworks are set up to allow sensitivity analysis to be modelled, typically requiring the user to change one or two cells to model the impact of a change in GDP growth or inflation forecast. - Solutions are often “homemade,” with home-grown development fostering learning, discovery, ownership, and understanding that may be lacking in standardized or templated solutions. ### Stakeholder engagement and coordination - Formal processes exist, for example, Macro-Working Groups or regular sets of bilateral meetings. Typical stakeholders outside the MFU include the MoF’s revenue agency, budget and debt departments, the statistics office, planning ministry if needed and the central bank. - Circulated versions of the framework are limited. A limited number of versions of the framework and its forecasts should be circulated to other stakeholders during the year to ensure everyone is working with the same set of numbers, reducing questions and confusion. - Appropriate timing. The framework should consider the release of data (for example, national accounts, final budget outcomes) and the demands of the budget calendar, so that macro-fiscal forecasts are ready to guide the budget preparation process, such as setting the overall annual and multiyear expenditure ceiling. ### Communication of the MTFF - Publishing the MTFF in a fiscal strategy report (FSR) enhances transparency of public finances and, over time, can increase trust in the government's ability to manage its finances, positively impacting macro-fiscal outcomes. - FSRs should: - Offer clarity on the government’s fiscal policy intentions and promote informed public debate on the medium-term outlook and policy choices. - Be analytically robust, consistent in content and format (after initial capacity building), and user-friendly to ensure effective communication. - Add more content and improve quality and presentation as governments build capacity. - A sound communication strategy before FSR publication may include presentations by the head of government to the legislature, press releases, and meetings with key stakeholders (for example, national media and investors). - Effective communication of fiscal strategy and plans bolsters credibility, especially when combined with: - a clear commitment to deliver on plans, - a good track record of fiscal performance, - strong fiscal institutions. - Governments should treat the MTFF and the FSR as key policy decisions within the government, fostering discussion, endorsement, and commitment within the cabinet rather than as merely technical exercises. ### Reporting and monitoring - Ongoing monitoring and reporting on forecasts versus outcomes after FSR publication allows assessment of forecast reliability and fiscal performance. - MoFs traditionally oversee reporting and analysis, including: - monitoring annual budget execution and multiannual projections versus initial targets, - conducting monthly or quarterly reporting and analysis of budget execution, - carrying out formal mid-year budget reviews to assess budget outturns against initial budget and fiscal targets and adjust as required. - Deviations against the previous set of forecasts or forecast changes should be analyzed and published in a dedicated section of the FSR. - The legislature and fiscal councils can play important roles in monitoring fiscal performance: - Legislatures should hold governments accountable through discussions and hearings. - Fiscal councils may assess or endorse government forecasts, provide an opinion on the MTFF, and monitor compliance with fiscal strategies and/or rules. - A fiscal council’s effectiveness depends on its capacity level, expertise and resources, and the level of public interest. - In low-capacity countries, accountability may fall to the supreme audit institution, the legislature, and the media. - Monitoring gaps are noted, especially in some EMEs and LIDCs. ### Country examples and context (summary references from surrounding text) - Advanced Economies (AEs): - AEs adopted harmonized classification systems for multi-year projections, annual budgets, and final accounts. - Examples highlight use of multi-year departmental expenditure limits, spending reviews, independent fiscal forecast institutions, climate integration, and intergenerational reporting. - Specific practices mentioned include: - a three-year MTFF horizon (Sweden) and presentation of medium-term fiscal scenarios enabling expenditure ceilings; - production of medium-term forecasts five or six times a year (Sweden); - independent entities producing five-year forecasts twice a year (UK). - Emerging Market Economies (EMEs) and resource-rich countries: - Since the 2000s, many EMEs implemented MTFFs as part of wider fiscal and PFM reforms, often accompanied by FRLs. - Resource-rich country frameworks should address short-term resource-related volatility, fiscal risk management, and strong PFM practices. - Key features for resource-rich countries include robust and realistic forecasts, fiscal risk analysis, robust budget execution, cash and debt management, and accounting and reporting. - MTFF coverage could be expanded from general government to the non-financial public sector to capture natural resources related public corporations. - Country examples cited for notable practices: Chile (resource framework), Colombia (10-year projections and comprehensive fiscal risk analysis), Costa Rica (development and political support for MTFF), Thailand (Fiscal Policy Committee for political engagement), Poland (integration with national development plans), South Africa (budget transparency and linkage to MTBF). *Source: Box 3. Common Technical Features of Successful Frameworks.* ### Box 5. Select Emerging Market Economy Country Examples ### Box 5. Select Emerging Market Economy Country Examples ### Chile — MTFF based on a structural balance rule - Legal framework: Financial Management Law requires the MoF to develop a MTFF. - Basis and purpose: - MTFF derived from the structural balance rule that nets out the cyclical impact of key variables affecting central government income, economic activity, and prices of copper and molybdenum. - Helps insulate budgets from volatility in resource prices. - Preparation and publication: - Prepared by the MoF and published since 2000. - Main macro-fiscal projections for a four-year period presented in the third quarter Public Finance Report (PFR), submitted in late September with the draft budget. - MTFF updated every three months as part of the quarterly PFR; most updates in the third quarter report. - Content and mechanisms: - Includes macroeconomic assumptions, income and expenditure projections, and details on commodities and copper markets. - Presents projection of the budget balance of the consolidated central government incorporating the structural fiscal surplus target. - An aggregate ceiling for maximum expenditure compatible with the structural balance rule is calculated based on projections for total cyclically adjusted revenue (Curristine and others 2021). - Aggregate expenditure ceilings for outer years are indicative. - MTFF expenditure ceilings complemented by expenditure baselines (committed expenditures) for central government, presented at the aggregate level and maintained by the Budget Directorate. - Combination of MTFF ceilings and “committed expenditures” enables assessment of fiscal policy room. ### Colombia — legally mandated long-horizon MTFF with fiscal council oversight - Legal framework and scope: - 2003 Fiscal Transparency and Responsibility Law: legal obligation to prepare and submit a MTFF for a period of 10 years with the draft annual budget. - 2023 MTFF provided projections for 2023-34 (first time covering a 12-year period). - Role and linkages: - MTFF guides annual budgets and instruments such as the MTBF, the annual Financial Plan, and Annual Investments Operating Plan. - Content legally regulated: analysis of macro-fiscal results from prior period, medium-term macro-fiscal forecasts, international macroeconomic context, fiscal strategy description. - Fiscal rules and institutions: - Law 1473 2011 established fiscal rules and an independent fiscal council, Comité Autónomo de la Regla Fiscal; modified in 2021 by the new Social Investment Law. - Fiscal council mandates: monitor compliance with fiscal rules, provide calculations of oil and economic cycles for the structural balance rule, publish technical opinion on the MTFF. - 2021 Law revised fiscal rule to include a debt limit (71 percent of GDP) and a debt anchor (55 percent of GDP) and a primary structural balance formula depending on distance to the anchor. - Risk analysis and scenarios: - Fiscal risk assessment published as a chapter of the MTFF including macroeconomic risks, pensions, guarantees, court rulings, PPPs, and natural disasters with quantification. - Government conducts stress-testing and scenario analysis for external and internal shocks; analysis feeds into revenue, expenditure, and debt projections. - MTBF linkage: - MTBF prepared since 2006; estimates based on expenditure ceilings established in the MTFF, in line with the fiscal rule. ### Costa Rica — top-down MTFF with strong political support and institutional coordination - Development and coverage: - First MTFF published in 2021 for the central government; in 2022 coverage extended to the Non-Finance Public Sector following IMF TA. - General requirements and calendar included in the 2018 Fiscal Responsibility Law and regulation. - Institutional arrangement: - Small core technical group attached to the Minister of Finance’s office produces the MTFF in coordination with budget, revenue, treasury, debt, and accounting directorates. - Transparent and detailed calendar for inputs; models documented in manuals to mitigate staff turnover. - Content, timing, and uses: - MTFF provides a full picture of public finances, including 5-year projections of the NFPS with overall fiscal strategy and fiscal risks analysis. - Published in March/April annually ahead of the budget process and updated in August/September with annual budget documents for the central government. - MTFF informs fiscal strategy and fiscal rule implementation; includes a chapter on fiscal risks and recently incorporated analysis of climate transition risks. - Capacity building: - IMF TA on macroeconomic modelling linking fiscal, real, external, and monetary sectors enabled simulation of reforms and shock scenarios. ### Poland — MTFF embodied in the EU Convergence Program (CP) - Legal and reporting framework: - Annual EU Convergence Program (CP) serves as the MTFF report. - Public Finance Act (PFA) requires a multi-annual financial plan in the CP, in compliance with EU fiscal legislation and guidelines. - Content: - Contains macroeconomic outlook, medium-term fiscal prospects and scenarios, planned discretionary measures, and projected fiscal aggregates four years ahead. - High-level narrative and medium-term projections of capital spending and other expenditure components; does not distinguish between ongoing and new projects. - Fiscal governance: - Multi-annual financial plan constitutes the basis for the draft budget law for the following financial year. - Fiscal anchor supported by comprehensive operational fiscal rules; main operational rule is the national stabilizing expenditure rule set out in the PFA. - Multi-year investment programming: - Council of Ministers requires budget entities to submit multi-annual programs for implementation of sector strategies; some programs span 10 years or more and are reviewed by an inter-ministerial committee including the MoF. ### South Africa — internationally recognized budget transparency and MTFF integration - Recognition and political buy-in: - First in the 2019 Open Budget Survey and second in the 2021 Survey. - Success attributed to strong political buy-in championed by the Minister of Finance. - MTFF presentation and timing: - Since 1998, MTFF elements (Medium Term Strategic Framework, MTSF) mostly published in the Medium-Term Budget Policy Statement (MTBPS). - MTBPS tabled in Parliament 2-3 months before the budget; contains macro-economic assumptions, overall objectives for the next three years, and projected revenue and expenditure for the next three years. - A fiscal risk statement provided as an annex. - Budget documents and processes: - When budget is tabled, documents include medium term forecasts of revenues, expenditure, and financing over 3 years, estimates for the current year, and outturns for 3 previous years. - Material budget changes require legislature approval. - Models develop baselines (no-policy change) and policy scenarios; top-down fiscal projections complemented with bottom-up budgeting to coordinate MTFF and MTBF. ### Thailand — MTFF in legislative framework with top-down budgeting and fiscal policy committee - Legal framework and institutional roles: - 2018 Fiscal Responsibility Act (FRA) mandates establishment of the Fiscal Policy Committee responsible for fiscal policy management, including preparing and revising the MTFF and setting fiscal rules. - Committee chaired by the Prime Minister; comprises the Budget Bureau, the MoF, the Bank of Thailand (BOT), and the National Economic and Social Development (NESD) Council. - MoF responsible for revenue and financing; Budget Bureau responsible for expenditure allocations; NESD Council and BOT responsible for macroeconomic forecasts. - Strategic linkage and use: - MTFF used as the master plan drawing from the National Strategy (30-year development vision) for fiscal and budget management covering fiscal planning, budget proceedings and public debt administration. - National Strategy translated into NESD plans covering a five-year period guiding annual budget resource allocation. - Content and reporting: - MTFF is a rolling plan with estimates for at least three outer years; includes fiscal objectives and policies, macro-fiscal projections, fiscal and financial obligations. - Fiscal risk statement published on MoF website; debt sustainability analysis prepared by the Committee on Fiscal Risk Management. - Statement and analysis prepared annually in March and include macroeconomic and fiscal risks and risks related to state agencies’ operations; coordination between BOT and NESD Council used for quality assurance. ### Low Income Developing Countries (LIDCs) — procedural approaches and sequencing - Legal adoption: - Several LIDCs (e.g., Rwanda and Uganda) have PFM laws requiring MTFF documents in budget documentation (Battersby and Lienert 2021). - Procedural vs. permanent rules: - Instead of permanent quantitative fiscal rules, laws often incorporate a procedural approach similar to Australia and New Zealand, with variants in how fiscal aggregates are constrained. - Rwanda’s law allows government to change MTFF fiscal aggregates annually. - Uganda requires a Charter of Fiscal Responsibility to be adopted soon after elections; Parliament approves multi-year objectives for fiscal aggregates. - Union directives: - For countries in economic and monetary unions, directives (e.g., CEMAC and WAEMU) can require MTFF production and wider PFM reforms. - Implementation guidance: - For LIDCs implementing MTFFs, important to start with basics, build capacity and processes, and sequence and tailor reforms (Diamond 2013; Gupta 2014). ### Box 6. Selected Low Income and Developing Country Examples - Benin — transparency and budget process integration - Open Budget Survey: moved from 1 in 2012 to 65 points in 2021. - MTFF included in the Multi-Annual Budgetary and Economic Programming Document; Organic Budget Law (article 59) requires annual production and submission to Parliament before May 30. - MTFF spans current year plus at least three years; distinguishes current expenditures and investment expenditures. - Published systematically in June (initial version) and December (final version after budget adoption). - MTFF informs annual budget through three-year envelopes sent by the General Directorate for Budget (DGB) to line ministries; strong ownership at DGB and link to program budgeting and MTBF aided results. - Line ministries prepare DPPDs (multi-year expenditure programming documents) and present expenditure plans by program, classification, and funding source. - Cambodia — developing forecasting capacity and MTFF process - MEF has been building macroeconomic and fiscal forecast capacity with IMF TA. - General Department of Policy (GDP) drives MTFF process; GDP and General Department of Budget (GDB) coordinate to provide fiscal envelope. - Annual macroeconomic and fiscal policy macro-framework produced and published by GDP with medium-term macro-fiscal forecasts. - GDP working on an MTFF document including a chapter on medium-term fiscal strategy (including a medium-term fiscal anchor) and narrative fiscal risk assessment. - Current MTFF does not specify compliance requirements with envisaged fiscal rules; Public Finance System law requires three-year Budget Strategy Plans by ministries linking priorities to National Strategic Development Plan. - Uganda — MTFF aligned with fiscal rules and regional convergence criteria - Debt sustainability guided by general government fiscal rules for debt and deficit; MTFF published (Tandberg and others 2022). - Under the Charter for Fiscal Responsibility (CFR), Uganda committed to a government deficit rule of no more than 3 percent of GDP and a 50 percent of GDP ceiling on the present value of debt for both central and local government (consistent with East African Community convergence criteria). - MTFF prepared twice a year to guide fiscal policy through the annual budget process. - MTFF forecasts published in the Budget Framework Paper with breakdown of current and development expenditure. - Updated CFR accounts for oil revenue volatility and has annual deficit targets inbuilt. - Fiscal risk statement included in the annual Budget Framework Paper; PFM legal frameworks require reports on fiscal risks (annually), and pre- and post-election fiscal update reports. - Uganda MoF (2022), “Charter for Fiscal Responsibility FY2021/22 – FY2025/26” states the fiscal risk statement shall contain main sources of annual risks (macroeconomic risks, natural resource revenues, loans and guarantees, capacity constraints) and include a strategy for managing fiscal risks. - Uganda cited as a positive example in the African region for MTFFs improving fiscal discipline (Comelli and others 2023). *IMF | How to Note 24 — Box 5. Select Emerging Market Economy Country Examples.* ### 2. Building robust institutional and technical arrangements, alongside comprehensive ### 2. Building robust institutional and technical arrangements, alongside comprehensive ### Overview — holistic approach and key dimensions - A holistic approach is needed encompassing the following dimensions: legal frameworks, building strong institutional arrangements, linking MTFFs with the annual budget process, technical capacities, and developing communication strategies. - Understanding the linkages between these dimensions is important both for countries introducing MTFFs and for countries with developed MTFFs to identify gaps. - The approach entails capacity-building measures alongside institutional and technical arrangements. ### Sequencing and tailoring to country context - Adopt a sequenced approach tailored to the country's context, gradually building capacity and sophistication over time. - An MTFF should be customized to the country’s specific context, including initial PFM conditions and technical and institutional capacities. - Developing an MTFF can start with building up forecasting and analytical capacity. - Progression described: - Start with an MTFF projection spreadsheet. - Move over time to a more detailed and complete MTFF report. - Ensure a credible MTFF is in place before moving to an MTBF/MTEF because the MTBF/MTEF: - Presents variables at a more disaggregated level. - Needs to incorporate bottom-up information from the sectors. ### Legal frameworks and continuity - Including the MTFF in a country's legal framework promotes continuity and enforceability. - Recommended legal design: - Contain general MTFF principles in higher-level legislation. - Cover operational details and procedures in secondary legislation to provide flexibility as capacity develops. ### Technical forecasting capacity and data - Developing technical forecasting capacity is vital: producing multi-year macroeconomic and fiscal projections in a timely manner is a key component of an MTFF. - In low-capacity environments: - Building forecasting capacity can take time. - Start with basic forecasting tools and build more sophisticated models over time. - Sequence: macroeconomic projections first, then baseline forward estimates for fiscal aggregates. - Even advanced economies continue to enhance capacity in fiscal risk analysis and long-term projections; these remain limited even in AEs. - Reliable and available data determine forecast accuracy. - Setting up an MTFF can drive improvements in data quality through standardized procedures and timetables for data collection and sharing. - Promote consistency across government and agreement on data, assumptions, and technical terminology. - Frequency of MTFF revisions: - A good practice is to update the MTFF twice a year: - First update to guide budget preparation, published several months before the executive’s budget proposal in a pre-budget FSR. - Second update at the time when the finalized budget is published with the budget documents. - Other internal updates may take place during the year. - Revisions help reflect macroeconomic changes, but revisions that occur too frequently can undermine credibility. ### Institutional arrangements and linking to the annual budget process - Establishing institutional arrangements that link the MTFF to the annual budget process helps ensure integration into budgetary and fiscal policy decision-making. - Key arrangements and mechanisms: - Link the MTFF with the budget calendar, processes, and reports. - Establish a dedicated organizational structure, such as a MFU in the MoF. - Set out key stakeholders’ roles and responsibilities. - Establish formal coordination mechanisms between stakeholders, such as macro-fiscal working groups. - Have a strategic budget phase to ensure total expenditure ceilings are approved at the highest level to promote fiscal discipline. - Practical sequencing and operational points: - Ensure the MTFF is published before the preparation of the annual budget process and before ceilings are submitted to the sectors. - Ensure allocations to new expenditures or revenue policies reflect government priorities and their budgetary medium-term impact. ### Communication, stakeholder engagement, and transparency - Developing a communication strategy and engaging key stakeholders promotes understanding of the government’s fiscal strategy and plans among citizens, investors, and financial markets. - This is especially important in periods of fiscal uncertainty and high debt and deficit, where a clearly articulated medium-term fiscal plan and fiscal objectives build confidence. - The FSR and other budget documents can be enhanced over time as capacity increases (for example, by expanding coverage of fiscal risks). ### Monitoring, reporting, and accountability - Processes and procedures for monitoring and reporting are essential to hold the government accountable for fiscal performance. - Regular assessment of progress towards fiscal targets enables identification of bottlenecks and policy adjustments. - Improving MTFF quality: - Compare government forecasts with independent forecasters. - Report on forecasting errors. - Report and explain in-year adjustments and deviations from previous years' projections. - Roles of oversight institutions: - Legislatures and fiscal councils play a key role in holding the government accountable, monitoring adherence to fiscal objectives and rules, and evaluating macro-fiscal forecasts. - Their effectiveness depends on resource capacity and accurately reported information on budget execution. ### Implementation path and political/institutional considerations - The path toward successful MTFF implementation can be gradual, progressively building a multifaceted approach that acknowledges the interplay between technical, institutional, and political dimensions. - Important elements for success: - Government commitment to implementing a credible MTFF. - Cultivate public support for fiscal objectives. - Reinforce institutional capacity. - Nurture a culture of fiscal responsibility and transparency. - Regular reviews and monitoring to adapt institutional arrangements to changing circumstances. - Specific institutional arrangements will vary by governance structure and institutional capacity. ### Annex highlights — MTFF experiences in currency unions (selected findings) - Currency-union fiscal foundations should be underpinned by: - Common fiscal rules (numerical ceilings and design/enforcement elements). - Shared standards for PFM systems including MTFFs. - Fiscal coordination mechanisms. - European Union (EU): - Multi-annual objectives set over at least three years. - Most Member States have indicative frameworks with annual revisions; a few (e.g., Netherlands, Finland) have MTFFs for fixed periods that cannot be revised. - All Member States must comply with an expenditure rule that translates into ceilings. - The link of the annual budget with the medium-term plan remains de facto weak; conditions for revisions and explanations for revisions or deviations are not specified. - Reporting on fiscal costs and risks from climate change and related disasters is limited. - A new Regulation will enter into force in 2024 replacing Council Regulation (EC) No 1466/97 and will: - Replace SPs/CPs with medium-term fiscal-structural plans (same contents and calendar; submission by 30 April). - Add focus on explaining green investments and reforms to reduce debt. - Require each Member State to submit an annual progress report on implementation by 30 April. - Eastern Caribbean Currency Union (ECCU): - ECCB Monetary Council guidance in 1998 set a public debt ceiling of 60 percent of GDP and an overall deficit target of 3 percent of GDP by 2020; these were indicative and not legally binding. - The deficit target was subsequently abandoned; the debt target was postponed twice. - Current ECCU debt-to-GDP ceiling: 60 percent to be achieved by 2035. - Some countries enacted FRL changes with Parliamentary approval (Anguilla 2013, Grenada 2015, Dominica 2021); others used parliamentary resolution and Cabinet approval (St. Vincent and the Grenadines 2020, Antigua and Barbuda 2021). - ECCU faces strong vulnerability to natural disasters and heavy reliance on tourism and agriculture; rule-based frameworks can help build resilience. - Central African Economic and Monetary Community (CEMAC): - Fiscal policy designed and implemented by individual MoF; each country sets its own fiscal deficit target. - Directive on Transparency and Good Governance requires the budget law be encapsulated into a medium-term fiscal policy framework. - Currency union surveillance combines a budget balance rule with a debt rule. - Three primary convergence criteria: (i) central government basic fiscal balance (in balance or surplus), (ii) central government total debt below 70 percent of GDP, (iii) governments should not accumulate arrears. - Supplementary criteria (since 2008) include: basic structural balance using oil revenue 3-year moving average; non-oil basic balance (percent of non-oil GDP). - MTFF implementation must address pro-cyclicality where oil income dominates the business cycle. - West African Economic and Monetary Union (WAEMU): - Regional surveillance framework adopted in 1996 to ensure sustainability and consistency with common monetary policy. - Reform of WAEMU PFM directives in 2009 introduced obligation for Member States to prepare an MTFF to inform annual budget preparation (Directive 06/2009; articles 52 and 57). - MTFF captured in a “document for pluriannual economic and fiscal programming” (DPBEP) covering at least three years and the wider public sector. - DPBEP to be adopted by the Council of Ministers before the end of the second quarter to underpin final budget preparation (annual budget usually submitted in October). - Regional convergence was temporarily achieved at the aggregate level in 2019; the fiscal framework was suspended in 2020 due to the pandemic. - The WAEMU Commission is conducting a review of the fiscal framework. *Italic: IMF | How to Note 27–33 (extracted content from the provided chapter).* ### Annex 3. Details on Developing a Basic MTFF Projection ### Annex 3. Details on Developing a Basic MTFF Projection ### Tool overview - Purpose: Set out principles for an entry-level Medium-Term Fiscal Framework (MTFF) projection tool suitable for low-capacity environments; typically implemented via spreadsheet. - Design focus: Practicality where data availability and staff resources may be limited. ### Historical forecast error analysis - Objective: Identify large and historically hard-to-forecast revenue and expenditure items to focus analytical effort. - Two error measures: - Mean average error: (∑ (y_i − x_i) / n). If significantly different from zero it suggests optimism or pessimism bias. - Mean absolute error: (∑ |y_i − x_i| / n). If large, suggests item is difficult to forecast accurately. - Threshold example: A mean average error "Significantly different from zero (for example, > 0.5% of GDP)" indicates systematic bias. - Guidance on forecast vintages: Use vintages that inform senior decision making (e.g., budget documentation, fiscal strategy papers). ### Stage 1: Forecasting baseline revenue - Focus on the five most significant “large-and-difficult-to-forecast” revenue items identified from error analysis. - Method: Identify revenue base for each item and calculate historical revenue buoyancy to determine growth relative to the base (e.g., VAT linked to nominal GDP or disposable household income). - Small or unclear-link items: - For collections < 0.1 percent of GDP, or items with no clear link to economic performance, use simple assumptions (e.g., change in line with nominal GDP or linear trend over previous five years). - Policy changes: - Model first-round effects (no behavior change) and second-round effects (behavioral responses using demand elasticities). - Grants from development partners: - Options: simple average/trend, fixed percentage of GDP, or manual assessment for significant grants. - Manual assessment steps: 1. Classify each grant to determine if non-receipt creates a financing gap. 2. Assign a probability for likelihood of receipt and compute a risk-adjusted grants forecast. - Example (Table A3.2): headline and risk-adjusted grant values (values shown as in source): - Grant 1: Likelihood 0.5; 2023/24 50.0 2024/25 50.0 2025/26 50.0 → Risk adjusted 25.0 25.0 25.0 - Grant 2: Likelihood 0.25; 2023/24 65.0 2024/25 80.0 2025/26 80.0 → Risk adjusted 16.3 20.0 20.0 - Grant 3: Likelihood 0.75; 2023/24 30.0 2024/25 30.0 2025/26 30.0 → Risk adjusted 22.5 22.5 22.5 - Grant 4: Likelihood 0.75; 2023/24 25.0 2024/25 25.0 2025/26 25.0 → Risk adjusted 18.8 18.8 18.8 - Grant 5: Likelihood 1; 2023/24 45.0 2024/25 45.0 2025/26 0.0 → Risk adjusted 45.0 45.0 0.0 - Total grants headline: 215.0 230.0 185.0 → Total risk adjusted: 127.5 131.3 86.3 - Contingency: For counterpart and budget support grants consider setting aside a contingency equal to headline minus risk-adjusted value. ### Stage 2: Forecasting baseline expenditures - Baseline concept: Cost of delivering existing policies given changes in population, prices, and cost drivers. - Simple baseline methods (examples from source): - Personal emoluments (Wages and Salaries): change in civil servant headcount * fixed percentage salary increase. - Example: = 100,000 = 100,000 * (1-0.01) * (1+ 0.03) = 101,970 (1% decrease in headcount, 3% increase in salary level) - Use of Goods and Services: population growth * inflation. - Example: = 50,000 = 50,000 * (1+0.013) * (1+0.08) = 54,702 - Subsidies and transfers: population growth * energy price inflation. - Example: = 30,000 = 30,000 * (1+0.013) * (1+0.15) = 34,948 - Capital spending: - Distinguish existing (committed and ongoing) projects from new (uncommitted) projects and minor capital aggregated. - Example capital spending by year (Table A3.3): - BY BY+1 BY+2 BY+3 BY+4 BY+5 - Capital spending: 500 520 540 560 580 600 - Ongoing projects: 350 240 200 140 30 5 - New projects: 150 280 340 420 550 595 - Link capital spending to operations and maintenance (O&M) recurrent pressures; treat O&M of approved projects as existing policy. - Example R coefficients for O&M (Table A3.4: percentages preserved exactly): - Agriculture: ADB 2.3% World Bank 4.7% Average 3.5% - Education: ADB 2.9% World Bank 7.4% Average 5.2% - Energy: ADB 4.7% World Bank 1.3% Average 3.0% - Environment: ADB 7.4% World Bank 1.7% Average 4.6% - Health: ADB 7.3% World Bank 3.0% Average 5.2% - Telecommunications: ADB 4.3% World Bank 0.3% Average 2.3% - Transportation: ADB 1.9% World Bank 2.5% Average 2.2% - Urban Development: ADB 1.6% World Bank 1.7% Average 1.7% - Water supply/sanitation: ADB 5.4% World Bank 4.4% Average 4.9% - Average all sectors (weighted): ADB 4.3% World Bank 3.5% Average 3.9% - Note: estimating country-specific O&M for scaled-up capital programs is recommended. ### Stage 3: Forecasting the debt stock and interest payments - Debt stock formula (as in source): - debt_stock_BY = debt_stock_BY-1 + net_borrowing_BY - Recommendation: Subdivide debt into domestic and foreign when multiple currencies are present; include exchange rate assumptions. - Hidden liabilities: Identify and quantify expenditure arrears, defined-benefit pension liabilities, government-backed loan guarantees, public corporation debts; incorporate major ones into MTFF or fiscal risk process. - Interest payments: - Interest payments based on debt_stock_BY * average interest_rate_BY. - Circularity: Interest affects deficits and borrowing, creating a debt-interest loop; spreadsheet circular reference typically requires goal seek to close the framework. - Increased accuracy by disaggregating debt by domestic/foreign, short/long term, concessional/open market. ### Stage 4: Fiscal balance and financing - Financing covers transactions in financial assets and liabilities and describes how deficits are financed (Treasury bills, long-term bonds, concessional foreign financing). - Key requirement: Net financing should equal the fiscal deficit. - Sign conventions: Match those used in budget documents (e.g., (+) borrowing, (-) repayments). - Balancing behavior: New borrowing can follow debt strategy objectives (e.g., shift from Treasury bills to longer maturities). Short-term domestic borrowing is often the residual balancing item. ### Stage 5: Policy scenario, balancing items, and feedback loops - Policy scenario = difference between baseline revenue/expenditure and fiscal targets/ceilings. - Positive room: scope for new policies. - Negative space: revenue increases and/or spending cuts needed to meet fiscal rules/limits. - Balancing items: - Should be under government control to preserve credibility; commonly expenditure items (capital spending on new projects, goods and services). - Financing balancing items often short-term instruments (treasury bills). - Assess realism of residuals (e.g., consequences of a 40 percent cut in goods and services). - Feedback loops: - Large spending changes affect GDP and thus future revenues and percent-of-GDP denominators. - Adjust GDP forecasts for fiscal effects with iteration; starting point: manually adjust real growth for Public Administration/Government subsector. Advanced tools can automate feedback. ### Stage 6: Realism assessment and risk analysis - Realism: Assess feasibility of financing forecasts—appetite in domestic market, impact on interest rates—consult debt office and central bank experts. - Sensitivity analysis: - Adjust one input variable to measure impact on fiscal outcomes (example shocks: GDP, inflation, interest rates, commodity prices). - Simple approach: ±1 percentage point variation; alternative: shocks measured in standard deviations for comparability. - Scenario analysis: - Combine shocks to several macro variables to produce “best case” and “worst case” scenarios (e.g., varying GDP growth, inflation). - Present results in a Fiscal Risk Statement as part of Macroeconomic Risks. ### Practical resources - IMF free online training on fiscal forecasting (IMFx on edx.org/school/imfx). Relevant courses/modules listed in source: - Public Financial Management (PFMx): Module 5: The Medium-Term Budget Framework - Revenue Forecasting and Analysis (RFAx): All modules - Projecting Public Debt – The Public Debt Dynamics Tool (DDTx): All modules - Courses include videos, transcripts, multiple-choice questions, and are available in several languages. *Annex 3. Details on Developing a Basic MTFF Projection (source document).* ### References ### htnea2024005 - References ### Medium-Term Budget Frameworks and Fiscal Framework Design - Allen, Richard, Taz Chaponda, Lesley Fisher, and Rohini Ray. 2017. “Medium-Term Budget Frameworks in Sub-Saharan Africa.” IMF Working Paper 17/203, International Monetary Fund, Washington, DC. - Battersby, Bryn, and Ian Lienert. 2021. “Macro-Fiscal Management Practices in Eastern and Southern Africa.” IMF Working Paper 21/30, International Monetary Fund, Washington, DC. - Battersby, Bryn and Eric Lautier. 2019 “Developing Medium Term Macro-fiscal Forecasting Frameworks in East Africa”, IMF PFM blog. - Harris, Jason, Richard Hughes, Gösta Ljungman, and Carla Sateriale. 2013. “Medium-Term Budget Frameworks in Advanced Economies: Objectives, Design, and Performance.” In Public Financial Management and Its Emerging Architecture, Marco Cangiano, Teresa Curristine, and Michel Lazare (Eds.) Washington, DC: International Monetary Fund. - Helio, Tollini. 2021. “Brazil: Moving the budget focus from the short to the medium term.” OECD Journal on Budgeting 2021(2). - Ljungman, Gösta, 2007. “The Medium-Term Fiscal Framework in Sweden.” OECD Journal on Budgeting 6(3). - Moretti, Delphine, Anne Keller, Macro Majerack. 2023. “Medium-Term and Top-down Budgeting in OECD Countries.” OECD Journal on Budgeting 2023(3). - Sherwood, Monika. 2015. “Medium Term Budgetary Frameworks in EU Member States.” Discussion Paper 21, European Commission, Brussels. - Schiavo-Campo. Salvatore. 2009. “Potemkin Villages: “The” Medium-Term Expenditure Framework in Developing Countries.” Public Budgeting & Finance. 2009 (2) - Filc, Gabriel, and Carlos Scartascini. 2010. “Is Latin America on the Right Track? An Analysis of Medium-Term Frameworks and the Budget Process.” IADB Working Paper Series, No. 160, Inter-American Development Bank, Washington, DC. - Overseas Development Institute (ODI). 2003. “Implementing a Medium-Term Perspective to Budgeting in the Context of National Poverty Reduction Strategies.” ODI, London. - World Bank. 2013. “Beyond the Annual Budget: Global Experience with Medium-term Expenditure Frameworks.” Work Bank, Washington, DC. - Radu, Diana. 2023. “Domestic Medium-Term Budgetary Frameworks in the EU: Fit for Purpose and for the Future?.” European Commission, Discussion Paper 189 July 2023 - Raudla, Ringa, James W. Douglas, Muiris MacCarthaigh. 2022., “Medium‐term expenditure frameworks: Credible instrument or mirage?.” Public Budgeting & Finance. 2022 (3) ### Fiscal Transparency, Credibility, Rules, and Communication - Arbatli, Elif, and Julio Escolano. 2015. “Fiscal transparency, fiscal performance and credit ratings.” Fiscal Studies 36(2): 237–270. - Hameed, Farhan. 2005. “Fiscal Transparency and Economic Outcomes.” IMF Working Paper 05/225, International Monetary Fund, Washington, D.C. - End, Nicolas. 2020. “Rousseau’s Social Contract or Machiavelli’s Virtue? Measuring Fiscal Credibility.” AMSE Working Paper 2042, Aix-Marseille School of Economics, France.. - End, Nicolas, and Gee Hee Hong. 2022. “Trust What You Hear: Policy Communication, Expectations, and Fiscal Credibility” IMF Working Paper 22/36, International Monetary Fund, Washington, DC. - Caselli, F., H. Davoodi, C. Goncalves, G.H. Hong, A. Lagerborg, P. Medas, A. Minh Nguyen, and J. Yoo. 2022. “The Return to Fiscal Rules.” IMF Staff Discussion Note 2022/002, International Monetary Fund, Washington, DC. - Davoodi, Hamid, Paul Elger, Alexandra Fotiou, Daniel Garcia-Macia, Xuehui Han, Andresa Lagerborg, Waikei R. Lam, and Paulo A. Medas. 2022. “Fiscal Rules and Fiscal Councils: Recent Trends and Performance during the COVID-19 Pandemic.” IMF Working Paper 2022/011, International Monetary Fund, Washington, DC. - Eyraud, L., X. Debrun, A. Hodge., A. Lledó, and C. Pattillo. 2018. “Second-Generation Fiscal Rules: Balancing Simplicity, Flexibility, and Enforceability” IMF Staff Discussion Notes 18/04, International Monetary Fund, Washington, DC. - Commonwealth of Australia. 2014. “Charter of Budget Honesty Act 1998.” Office of Parliamentary Counsel, Canberra, July. - Organisation for Economic Co-operation and Development (OECD). 2019. "Budgetary Governance in Practice: Australia", in Budgeting and Public Expenditures in OECD Countries 2019, OECD Publishing, Paris. ### Public Financial Management, Institutions, and Capacity - Cangiano, Marco, Teresa Curristine, and Michel Lazare. 2013. Public Financial Management and Its Emerging Architecture. Washington, DC: International Monetary Fund. - Fainboim, Israel, and Ian Lienert. 2018. “The Macro-Fiscal Function and Its Organizational Arrangements.” IMF Technical Notes and Manuals 2018/004, Washington, DC. - Gupta, Sanjeev, and Sami Ylaoutinen. 2014. “Budget Institutions in Low-Income Countries: Lessons from G-20.” IMF Working Paper 14/164, International Monetary Fund, Washington, DC. - Diamond, Jack. 2013. “Good Practice Note on Sequencing PFM Reforms.” Public Expenditure and Financial Accountability, World Bank, Washington DC. - Gaspar, Vitor, and Juan Toro. 2019. “Medium-Term Revenue Strategy—Taxation and Development.” International Monetary Fund, Washington, DC. - Gaspar, Vitor, David Amaglobeli, Mercedes Garcia Escribano, Delphine Prady, and Mauricio Soto. 2019. “Fiscal Policy and Development: Human, Social and Physical Investments for the SDGs.” Staff Discussion Note 2019/003, International Monetary Fund, Washington, DC. - Gupta, Sanjeev, and Sami Ylaoutinen. 2014. “Budget Institutions in Low-Income Countries: Lessons from G-20.” IMF Working Paper 14/164, International Monetary Fund, Washington, DC. ### Public Investment Management Assessment (PIMA) and Climate-Sensitive PFM - Aydin Sakrak, Ozlem, Bryn Battersby, Fabien Gonguet, Claude P Wendling, Jacques Charaoui, and Murray Petrie. 2022. “How to Make the Management of Public Finances Climate-Sensitive—'Green PFM.’” IMF How to Note 2022/006, International Monetary Fund, Washington, DC. - Battersby, Bryn, Imran Aziz, Andrew Ceber, Eivind Tandberg, and Willie Du Preez. 2022. “Rwanda: Public Investment Management Assessment—PIMA and Climate PIMA.” Technical Assistance Report International Monetary Fund, Washington, DC. - Tandberg, Eivind, Eduardo Aldunate, Imran Aziz, Suzanne Flynn, and Willie Du Preez. 2022. “Uganda: Technical Report—Public Investment Management Assessment.” IMF Country Report 2022/350, International Monetary Fund, Washington, DC. - Wendling, Claude, Sylke Von Thadden-Kostopoulos, Philippe Lonné, Pierre Roumegas, Sidiki Traoré, and Marie-Christine Uguen. 2023. “Benin: Technical Assistance Report—Public Investment Management Assessment.” IMF Country Report 2023/367, International Monetary Fund, Washington, DC. - Renteria, Carolina, Michelle Stone, Tjeerd Tim, Ed Hearne, and Carlos Mulas Granados. 2022. “United Kingdom: Technical Assistance Report—Public Investment Management Assessment IMF Country Report 2022/287, International Monetary Fund, Washington, DC. - International Monetary Fund (IMF). 2022a. “PIMA Handbook: Public Investment Management Assessment.” International Monetary Fund, Washington, DC. ### Country and Regional Fiscal Frameworks, Selected Issues, and Technical Assistance - Comelli, Fabio, Peter Kovacs, Jimena Montoya, Arthur Sode, Antonio David, and Luc Eyraud. 2023. “Navigating Fiscal Challenges in Sub-Saharan Africa.” IMF Departmental Paper 2023/ International Monetary Fund, Washington, DC. - David, Antonio, Alexandre Nguyen-Duong, and Hoda Selim. 2022. “Strengthening the WAEMU Regional Fiscal Framework.” IMF Working Paper 2022/049, International Monetary Fund, Washington, DC. - Dizioli, Allan, Philippe D. Karam, Dirk V. Muir, and Siegfried Steinlein. 2017. “Australia’s Fiscal Framework: Revisiting Options for a Fiscal Anchor.” IMF Working Paper 17/286, International Monetary Fund, Washington, DC. - International Monetary Fund (IMF). 2016. " Central African Economic and Monetary Community: Selected Issues—Institutions and Medium-Term Fiscal Framework." International Monetary Fund, Washington, DC. - International Monetary Fund (IMF). 2022b. “Eastern Caribbean Currency Union: Selected Issues.” IMF Country Report 2022/254, International Monetary Fund, Washington, DC. - International Monetary Fund (IMF). 2023a. Fiscal Monitor: On the Path to Policy Normalization. Washington, DC, April. - International Monetary Fund (IMF). 2023b. “West African Economic and Monetary Union: Selected Issues Paper.” IMF Country Report 23/103. International Monetary Fund, Washington, DC. - Sever, Can, and Athene Laws. 2023. “Revamping the West African Economic and Monetary Union (WAEMU) Fiscal Framework.” IMF Selected Issues Paper 2023/028, International Monetary Fund, Washington, DC. - Uganda Ministry of Finance. 2022. “Charter for Fiscal Responsibility FY2021/22 – FY2025/26.” - Rentería, Carolina, Trish Chiinze, Sagé de Clerck, Foyzunnesa Khatun, Natalie Manuilova, and Vincent Tang. 2024. “South Africa: Fiscal Transparency Evaluation. ”IMF High Level Summary Technical Assistance Report 2024/017, International Monetary Fund, Washington, DC. - Hansen, Torben, Eduardo Aldunate, Sagé de Clerck, Karim Foda, Duncan Last, Isabel Rial, Iwona Warzecha, and Barbara Ziolkowska. 2022. “Republic of Poland: Technical Assistance Report—Public Investment Management Assessment.” IMF Country Report 2022/321, International Monetary Fund, Washington, DC. - Blazey, Andrew, Anne Keller, Scherie Nicol, and Donna Degan. 2021. "Budgeting in Thailand." OECD Journal on Budgeting 2020 (3). ### Fiscal Risk Management, Development, and Complementary Analyses - Salazar, Natalia 2013. “Fiscal Risk Management for Development: The Case of Colombia.” World Bank, Washington, DC. - Ossowski, Rolando, and Håvard Halland. 2016. “Fiscal Management in Resource-Rich Countries: Essentials for Economists, Public Finance Professionals, and Policy Makers.” World Bank, Washington, DC. - Eyraud, Luc, William Gbohoui, and Paulo Medas. 2023. “A New Fiscal Framework for Resource-Rich Countries.” IMF Working Paper 23/230, International Monetary Fund, Washington, DC. - Battersby, Bryn, Imran Aziz, Andrew Ceber, Eivind Tandberg, and Willie Du Preez. 2022. “Rwanda: Public Investment Management Assessment—PIMA and Climate PIMA.” Technical Assistance Report International Monetary Fund, Washington, DC. - Rahim, Fazeer, Claude Wendling, and Eliko Pedastsaar. 2022. “How to Prepare Expenditure Baselines.” IMF How to Note 2022/002, International Monetary Fund, Washington, DC. - Davoodi, Hamid, Paul Elger, Alexandra Fotiou, Daniel Garcia-Macia, Xuehui Han, Andresa Lagerborg, Waikei R. Lam, and Paulo A. Medas. 2022. “Fiscal Rules and Fiscal Councils: Recent Trends and Performance during the COVID-19 Pandemic.” IMF Working Paper 2022/011, International Monetary Fund, Washington, DC. *Content compiled from the "References" section of htnea2024005 - References (source PDF filename: htnea2024005 - References).* --- _Source: https://www.imf.org/-/media/files/publications/howtonotes/2024/english/htnea2024005.pdf_