## _sdn1506techapx - REFERENCES

## Source details

**Canonical URL:** [_sdn1506techapx - REFERENCES](https://www.imf.org/-/media/websites/imf/imported-publications/external/pubs/ft/sdn/2015/_sdn1506techapx.pdf)

## Other formats

- [Markdown version](/-/media/websites/imf/imported-publications/external/pubs/ft/sdn/2015/_sdn1506techapx.pdf.md)
- [Structured JSON version](/-/media/websites/imf/imported-publications/external/pubs/ft/sdn/2015/_sdn1506techapx.pdf.json)

---

### I. Discretionary stimulus plans (LA6 countries)
- Brazil
  - No major discretionary stimulus program was put in place.
  - Growth of current expenditures remained strong, particularly health care transfers and pension outlays (due to reforms implemented in 2007–08).
  - A "policy lending" loan of 3.2 percent of GDP was provided to the state development bank (The Brazilian Development Bank) to facilitate greater lending by the latter to firms.
  - 2009 package: tax relief (personal income, vehicle purchases, financial transactions, capital imports, purchases of construction materials) and transfers to vulnerable groups (higher Bolsa Familia payments, a mortgage subsidy program, extension of unemployment benefits).
  - Estimated fiscal costs: 0.6 percent of GDP for tax relief measures and 0.2 percent of GDP for transfers.
  - Continued policy lending to BNDES: 2.7 percent of GDP in 2010, 1 percent in 2011, and 1.5 percent in 2012.
  - Other aspects of the 2009 stimulus package were unwound in 2010; further stimulus provided from 2012 onward.

- Chile
  - 2009 fiscal stimulus package components and magnitudes:
    - Public works: 0.5 percent of GDP.
    - One-time cash allowance for low-income households: 0.16 percent of GDP.
    - Temporary increase in subsidies for training measures: 0.13 percent of GDP.
    - Temporary reduction of income tax prepayments for companies: 0.33 percent of GDP.
    - Acceleration of personal income tax reimbursements: 0.16 percent of GDP.
    - Temporary elimination of stamp duty: 0.45 percent of GDP.
    - Recapitalizations and capital increases (Banco Estado, CODELCO, CORFO, FOGAPE) amounting to about 1 percent of GDP.
  - Excluding recapitalisation measures, overall stimulus envisaged: some 1.8 percent of GDP.
  - Programs were unwound in 2010–11.
  - More permanent reforms: extended unemployment benefits for fixed-term contract workers and a wage subsidy for young low-wage workers.

- Colombia
  - No discretionary stimulus program; priority was given to infrastructure and social spending.

- Mexico
  - 2009 stimulus package components and magnitudes:
    - Employment subsidies, additional health benefits and income transfers: about 0.2 percent of GDP.
    - Energy price support: some 0.4 percent of GDP.
    - Additional infrastructure investment: 0.74 percent of GDP.
    - Higher investment by PEMEX and states: 0.26 percent of GDP.
  - Total fiscal stimulus package size: about 1.7 percent of GDP.
  - Many measures designed to be temporary; energy price support linked to oil price developments and had no clear sunset clause.

- Peru
  - January 2009: biannual major fiscal stimulus package of 3.5 percent of 2009–10 average GDP.
  - Majority directed to infrastructure investments; small share to social protection measures.

- Uruguay
  - Stimulus measures in 2009 included increased spending and support measures (details summarized in table; not itemized here).

- Sources: IMF country staff reports; Organisation for Economic Co-operation and Development economic surveys; IMF staff calculations.

### II. Impact of the 2009 fiscal stimulus: modeling framework
- Model overview
  - Model used: IMF’s Flexible Suite of Global Models (FSGM).
  - FSGM features:
    - Annual, multi-region, general equilibrium models combining micro-founded and reduced-form formulations.
    - Fully articulated demand side, and some supply side features.
    - International linkages modeled in aggregate for each country/region.
    - Full stock-flow consistency: public deficits cumulate into public debt; current account balances cumulate into net foreign assets; investment cumulates into capital stock.
    - Endogenous rules for monetary and fiscal policy.
    - All model parameters, except those determining the cost of adjustment in investment, estimated from the data.

- Scenarios simulated
  - Baseline: replicates actual data for the LA6 in stylized form for 2009–13.
  - Scenario 1: Neutral fiscal policy stance in 2009–13
    - Characterized as an unchanged cyclically adjusted fiscal balance.
    - Examines drop in output in the absence of fiscal easing in 2009.
  - Scenario 2: Actual 2009 fiscal policy stance, with 2010–13 behavior modeled endogenously
    - Simulates actual fiscal policy stance in 2009.
    - For 2010–13, fiscal behavior modeled consistent with countries’ reaction to the widening output gap in 2009.
    - A fiscal reaction coefficient = fiscal impulse (change in cyclically adjusted deficit) ÷ change in output gap in 2009.
  - Note: "This reaction coefficient is used to simulate what the fiscal stance would have been" (applied to 2010–13).

### Simulation methodology for fiscal impulse/withdrawal (2010–13)
- Use of reaction coefficient
  - The 2009 reaction coefficient is used to simulate the fiscal stance from 2010 onward assuming the same responsiveness to the output gap as in 2009.
  - For Uruguay, which did not ease policy in 2009, acyclical fiscal policy for 2010–13 was simulated.

- Composition and classification of stimulus
  - Fiscal stimulus distributed across: public consumption, public transfers, capital spending, and revenue measures.
  - Contribution assumptions to structural fiscal deficit:
    - Capital and current spending add to the structural fiscal deficit with a coefficient of one.
    - The residual change in the structural deficit not attributed to spending changes is classified as revenue driven.

- Fiscal multipliers applied
  - Public investment: 1.1
  - Public consumption: 0.9
  - Public transfers: 0.5
  - Revenue measures: 0.5
  - Brazil: additional category "policy lending" with multiplier 0.5.

- Scenario composition rules and exceptions
  - Composition for 2010–13 aligned with 2009 impulse, except:
    - Brazil: policy lending assumed zero from 2010 onward.
    - Chile: actual composition of withdrawal used for 2010–12 due to strong countercyclical behavior.
  - Observed country behavior notes:
    - Mexico and Brazil: withdrawal of stimulus slower than suggested by fiscal reaction coefficient.
    - Chile: withdrawal faster.
    - Peru and Colombia: 2010–12 broadly consistent with 2009 fiscal reaction, mixed thereafter.

### Revenue performance and reforms in the LA6 since the global financial crisis
- Summary finding
  - In most LA6 countries, revenue as a share of GDP increased since the crisis and accounted for the bulk of fiscal correction between 2009 and 2014.
  - Increases driven by revenue-enhancing tax policy reforms, buoyancy, and better tax administration.

- Broad trends
  - Significant increase in revenue burdens since early 2000s for LA6.
  - Pre-crisis: both resource and non-resource revenues increased.
  - Post-crisis: non-resource revenue upward trend generally continued; resource revenues in most cases remained below pre-crisis levels.

- Country-level 2014 status relative to 2007
  - Brazil: total revenue ratios were above their 2007 levels.
  - Colombia: total revenue ratios were above their 2007 levels.
  - Mexico: total revenue ratios were above their 2007 levels.
  - Uruguay: total revenue ratios were above their 2007 levels.
  - Peru: lower resource revenue offset by stronger non-resource revenue, leaving total revenue ratio broadly unchanged.
  - Chile: decline in resource revenues outweighed rise in non-resource revenues.

- Drivers of revenue growth
  - Buoyant economic performance supported by strong global demand and commodity prices.
  - Domestic reforms broadening the base and introducing new taxes.
  - Better tax administration.
  - Lower inequality coupled with a rise in consumption favoring direct tax yields.

- Persistence assessment
  - If increases driven by revenue-enhancing reforms, they are likely to persist longer term.
  - If driven purely by strong growth and commodity prices, they could disappear if those conditions fade.

- Empirical assessment of reforms (2008–13)
  - Four out of six countries (Chile, Colombia, Mexico, and Peru) introduced revenue-enhancing reforms since the crisis; estimated yields explain part of the revenue increase between 2007 and 2013.
  - Uruguay: no new reform since 2007; revenue rise due to buoyancy and stronger administration.
  - Brazil: increase in tax burden explained by buoyant payroll revenue and tax amnesty programs in 2009, 2013, and 2014 that boosted tax repayment, offsetting tax cuts in 2012–14.

- Notable quantified reform items
  - Mexico: 2013 net effect of tax package estimated at 1 percent of GDP.
  - Colombia: 2010–14 combined yield of measures estimated at 0.4 percent of GDP per year on average during 2011–14.
  - Chile: 2012–13 measures — net effect of the 2013 tax reform estimated at 1 percent of GDP.
  - Peru: mining-related measures expected to yield 0.5 percent of GDP (IMF 2011b).
  - Brazil: IMF-estimated fiscal deficit increases related to measures of 0.4 percentage point of GDP in 2012, 1 percentage point of GDP in 2013, and 1.1 percentage points of GDP in 2014.

### Evolution of fiscal targets and rules (selected LA6 country summaries, 2008–14)
- Brazil
  - 2008 target: 3.8% of GDP to GG, with 2.2% of GDP to CG, and 0.7% of GDP to SOEs. Target (over)met: 3.9% of GDP for GG.
  - 2009: target changed in May 2009 to 2.5% of GDP; primary surplus finished at 2% of GDP using revised adjustor.
  - 2010: 3.3% of GDP to GG; target met using 0.33% of GDP investment adjustor.
  - 2012: 3.1% of GDP to GG; target met by using adjustor plus 0.3% of GDP from the SWF.
  - 2013: May 2013 target revised to 2.3% of GDP through use of the adjustor; final CG result 1.9% of GDP after using a 1.3 percent of GDP adjustor.
  - 2014: February 2014 target revised to a nominal primary surplus representing 1.9% of GDP; reported primary balance of R–$32.5 bn, or –0.6% of GDP.
  - Recurring "Other Operations" and adjustments (examples):
    - Tax Amnesties: 0.21% of GDP in 2008; 0.27% in 2009; 0.25% in 2010; 0.54% in 2011; 0.38% in 2012; 0.76% in 2013; 0.58% in 2014.
    - Policy lending through public banks (net): 0.71% of GDP in 2008; 3.16% of GDP in 2009; 2.69% of GDP in 2010; 1.02% in 2011; 1.46% in 2012; 0.69% in 2013; 0.98% in 2014.
    - PAC/PPI deductible spending examples: R$ 13.8bn in 2008; R$ 28bn in 2009; R$ 22.5bn in 2010 (0.6% of final GDP); R$ 32bn in 2011; R$ 45.2bn in 2013; R$ 67bn in 2014 (1.3% of final GDP).
  - Coverage changes:
    - Petrobras permanently excluded from coverage in May 2009 (–0.5% of GDP).
    - Late 2010 GG target changed to exclude Eletrobras.

- Chile
  - 2008 target: 0.5% of GDP (CG structural balance). Result: –1% of GDP (target missed).
  - 2009 target: 0.0% of GDP. Result: –3.1% of GDP (target missed). Stimulus package of 2.9% of GDP announced in Jan. 2009.
  - 2010 target: 0.0% of GDP. Result: –2.1% of GDP (target missed). Rule de-facto temporarily suspended after Feb. 2010 earthquake; reconstruction expenditure 1% of GDP.
  - 2011 target: –1.8% of GDP. Result: –1% of GDP (target met).
  - 2012 target: –1.5% of GDP. Result: –0.4% of GDP (target met).
  - 2013 target: –1.0% of GDP. Result: –0.5% of GDP (target met).
  - 2014 target: –1.0% of GDP (N/A result reported).
  - Notable operations:
    - Jan. 2009 stimulus package of 2.9% of GDP.
    - Reconstruction expenditure of 1% of GDP in 2010 and subsequent years.

- Colombia
  - 2008 target: 2.6% of GDP (primary NFPS surplus). Result: 3.5% of GDP (overmet).
  - 2009 target: 1.9% of GDP. Result: 0.9% of GDP (missed).
  - 2010 target: 0.1% of GDP. Result: –0.1% of GDP (missed).
  - 2011 target: 0.0% of GDP. Result: 1.1% of GDP (overmet).
  - 2012 target: 0.9% of GDP. Result: 3.3% of GDP (overmet).
  - 2013 target: 1.9% of GDP. Result: 1.5% of GDP (missed).
  - 2014 target: 1.8% of GDP (start of new fiscal rule).
  - One-off timing effects: delayed local government spending of 2011 and 2012 oil revenues influenced 2012–13 outcomes.

- Mexico
  - 2008 target: 0% of GDP (traditional balance). Result: –0.1% of GDP.
  - 2009 target: 0% of GDP for traditional balance (net of PEMEX investment). Result: –0.2% of GDP.
  - 2010 target: –0.7% of GDP for traditional balance (net of PEMEX investment). Result: –0.8% of GDP. Permitted by Art. 17 of the FRL with Congressional justification.
  - 2011 target: –0.5% of GDP. Result: –0.6% of GDP. Escape clause invoked in 2011.
  - 2012 target: –0.4% of GDP. Result: –0.6% of GDP. Escape clause invoked in 2012.
  - 2013 target: 0.0% of GDP. Result: –0.3% of GDP.
  - 2014 target: –1.5% of GDP for traditional balance (net of PEMEX investment). Result: –1.1% of GDP (met).
  - Off-budget/nonrecurring items examples:
    - Nonrecurring revenue: 0.5% of GDP in 2008; 1.3% of GDP in 2009.
    - Development banks' net lending around 0.3–0.5% of GDP in various years.

- Peru
  - 2008 targets: NFPS deficit rule 1% of GDP; CG real spending growth rule 3%. Result: surplus of 2.4% GDP.
  - 2009 targets: NFPS deficit rule 2% of GDP; CG real spending growth rule revised to 10%. Result: deficit of 1.3% of GDP. Exceptional clause invoked in 2009.
  - 2010 targets: NFPS deficit rule 2% of GDP; CG real spending growth rule revised to 8%. Result: deficit 0.3% of GDP.
  - 2011–2014: gradual tightening back to surplus targets; 2013–2014 spending rule suspended; NFPS deficit rule tightened to 0% of GDP in 2013 and 2014 (surplus outcomes reported for 2013).
  - Temporary measures: 2011/12 contingency plan 1% of average GDP.

- Uruguay
  - 2008 target: Consolidated public sector balance target –0.5% of GDP; net debt increase rule $275mn ($413mn with escape clause). Result: balance missed (–1.5% of GDP); net debt increase rule missed ($501mn). Escape clause triggered (energy crisis).
  - 2009 target: Consolidated public sector balance rule –2.0% of GDP; net debt increase rule $350mn (could be $700mn with escape clause). Result: balance met (–1.7% of GDP); net debt increase rule observed ($661mn) due to escape clause.
  - 2010 target: –1.2% of GDP; result met (–1.1% of GDP); net debt rule observed ($402mn) due to escape clause.
  - 2012 target: –1.4% of GDP; result missed (–2.1% of GDP); net debt rule (UI11,172mn) observed by invoking both escape clauses.
  - 2013 target: –2.1% of GDP; result missed (–2.4% of GDP); net debt rule observed only due to main escape clause.
  - 2014 target: –2.4% of GDP; result missed (–3.5% of GDP).
  - Notable operations:
    - Escape clause invoked multiple years due to droughts, energy sector impacts, and financial crisis effects.
    - Authorities set aside US$150 million of UTE’s profits in an Energy Stabilization Fund in 2010.
    - Currency of targets shifted from USD to UI in 2011, entailing relaxation of the rule.

*Source: FISCAL POLICY IN LATIN AMERICA – TECHNICAL APPENDIX (excerpt)._

### REFERENCES .............................................................................................................

### _sdn1506techapx - REFERENCES

### I. Discretionary stimulus plans (LA6 countries)
- Brazil
  - No major discretionary stimulus program was put in place.
  - Growth of current expenditures remained strong, particularly health care transfers and pension outlays (due to reforms implemented in 2007–08).
  - A "policy lending" loan of 3.2 percent of GDP was provided to the state development bank (The Brazilian Development Bank) to facilitate greater lending by the latter to firms.
  - A package of discretionary fiscal actions implemented in 2009 included tax relief (for taxes on personal income, vehicle purchases, financial transactions, capital imports, and purchases of construction materials) and transfers to vulnerable groups (higher Bolsa Familia payments, a mortgage subsidy program, and extension of the duration of unemployment benefits).
  - Estimated fiscal costs: 0.6 percent of GDP for tax relief measures and 0.2 percent of GDP for transfers.
  - Continued policy lending to BNDES: 2.7 percent of GDP in 2010, 1 percent in 2011, and 1.5 percent in 2012.
  - Other aspects of the 2009 stimulus package were unwound in 2010; further stimulus provided from 2012 onward in view of disappointing growth.

- Chile
  - 2009 fiscal stimulus package:
    - Increased spending on temporary programs: public works, 0.5 percent of GDP; a one-time cash allowance for low-income households, 0.16 percent of GDP; temporary increase in subsidies for training measures, 0.13 percent of GDP.
    - Tax reductions: temporary reduction of income tax prepayments for companies, 0.33 percent of GDP; acceleration of personal income tax reimbursements, 0.16 percent of GDP.
    - Temporary elimination of stamp duty, 0.45 percent of GDP.
    - Recapitalizations and capital increases (Banco Estado, CODELCO, CORFO, FOGAPE) amounting to about 1 percent of GDP to support financing to exporters and small corporations.
  - Excluding recapitalisation measures, the package envisaged an overall stimulus of some 1.8 percent of GDP.
  - Programs were unwound in 2010–11.
  - More permanent reforms: extended unemployment benefits for workers with fixed-term contracts (brought forward from 2010 to 2009) and a wage subsidy for young low-wage workers.

- Colombia
  - No discretionary stimulus program, but an effort to prioritize infrastructure and social spending.

- Mexico
  - 2009 stimulus package contained:
    - Employment subsidies, additional health benefits and income transfers for the unemployed, and other income support amounting to about 0.2 percent of GDP.
    - Energy price support of some 0.4 percent of GDP.
    - Additional infrastructure investment of 0.74 percent of GDP.
    - Higher investment by PEMEX and states of 0.26 percent of GDP.
  - Total fiscal stimulus package size: about 1.7 percent of GDP.
  - Many measures designed to be temporary (employment subsidies and social transfers); energy price support linked to oil price developments and had no clear sunset clause.

- Peru
  - In January 2009 the government launched a biannual major fiscal stimulus package of 3.5 percent of 2009–10 average GDP.
  - Majority of the stimulus directed to infrastructure investments; a small share funding social protection measures.

- Uruguay
  - Stimulus measures included increased spending and support measures in 2009 (details not itemized beyond inclusion in the table).

- Sources for the discretionary stimulus descriptions: IMF country staff reports; Organisation for Economic Co-operation and Development economic surveys; and IMF staff calculations.

### II. Impact of the 2009 fiscal stimulus: modeling framework
- Model overview
  - The IMF’s Flexible Suite of Global Models (FSGM) is used to quantify the impact of the fiscal stimulus and a counterfactual withdrawal scenario on output and public debt.
  - FSGM is a system of annual, multi-region, general equilibrium models, combining both micro-founded and reduced-form formulations of various economic sectors.
  - Features:
    - Fully articulated demand side, and some supply side features.
    - International linkages modeled in aggregate for each country/region.
    - Full stock-flow consistency: public deficits cumulate into the level of public debt; current account balances cumulate into the level of net foreign assets; investment cumulates into the level of the capital stock.
    - Endogenous rules governing the operation of both monetary and fiscal policy.
    - All model parameters, except those determining the cost of adjustment in investment, have been estimated from the data using a range of empirical techniques.

- Scenarios simulated
  - Baseline: model replicates the actual data for the LA6 in stylized form for 2009–13.
  - Scenario 1: Neutral fiscal policy stance in 2009–13
    - Characterized as an unchanged cyclically adjusted fiscal balance.
    - Examines how large the drop in output would have been in the absence of fiscal easing in 2009.
  - Scenario 2: Actual 2009 fiscal policy stance, with 2010–13 behavior modeled endogenously
    - Simulates the actual fiscal policy stance in 2009.
    - For 2010–13, countries’ fiscal behavior is modeled to be consistent with their reaction to the widening in output gap in 2009.
    - A fiscal reaction coefficient is calculated as the fiscal impulse (change in the cyclically adjusted deficit) divided by the change in output gap in 2009.

*Source: FISCAL POLICY IN LATIN AMERICA – TECHNICAL APPENDIX (April 30, 2015).*

### 2009. This reaction coefficient is used to simulate what the fiscal stance would have been

### _sdn1506techapx - 2009. This reaction coefficient is used to simulate what the fiscal stance would have been

### Simulation methodology for fiscal impulse/withdrawal (2010–13)
- The reaction coefficient from 2009 is used to simulate what the fiscal stance would have been from 2010 onward if fiscal policy had reacted to the output gap in the same way it did in 2009.
- For Uruguay, which did not ease policy in 2009, acyclical fiscal policy for 2010–13 was simulated.
- Fiscal stimulus is distributed across four categories: public consumption, public transfers, capital spending, and revenue measures.
- Assumptions on contribution of spending to the structural fiscal deficit:
  - Capital and current spending add to the structural fiscal deficit with a coefficient of one.
  - The part of the change in the structural deficit not attributed to the change in the spending-to-GDP ratio is classified as revenue driven.
- Fiscal multipliers used in the model:
  - Public investment: 1.1
  - Public consumption: 0.9
  - Public transfers: 0.5
  - Revenue measures: 0.5
- Brazil: an additional category “policy lending” is included with a multiplier of 0.5.
- Scenario composition rules and exceptions:
  - Composition of fiscal impulse/withdrawal for 2010–13 is kept aligned with the impulse of 2009 with exceptions:
    - For Brazil, policy lending was assumed to be zero from 2010 onward.
    - For Chile, which exhibited strong countercyclical behavior in 2010–12, the actual composition of withdrawal is used.
- Footnote-country behavior (as reported):
  - In Mexico and Brazil, the withdrawal of stimulus was slower than suggested by the fiscal reaction coefficient; in Chile it was faster.
  - Fiscal policies in Peru and Colombia were in 2010–12 broadly consistent with the fiscal reaction of 2009, but mixed thereafter.

### Revenue performance and reforms in the LA6 since the global financial crisis
- Summary finding:
  - In most LA6 countries, revenue as a share of GDP has increased since the crisis, accounting for the bulk of the fiscal correction between 2009 and 2014.
  - Revenue-enhancing tax policy reforms can account for part of the increase; buoyancy and better tax administration also played roles.
- Broad trends:
  - The LA6 countries witnessed a significant increase in their revenue burdens since the early 2000s.
  - Pre-crisis (run up to the global financial crisis): all countries experienced a significant increase in public sector revenue as a share of GDP, with both resource and non-resource revenues increasing.
  - Post-crisis: upward trend generally continued for non-resource revenues; resource revenues in most cases remained below their pre-crisis levels.
- Country-level 2014 status relative to 2007:
  - Brazil: total revenue ratios were above their 2007 levels.
  - Colombia: total revenue ratios were above their 2007 levels.
  - Mexico: total revenue ratios were above their 2007 levels.
  - Uruguay: total revenue ratios were above their 2007 levels.
  - Peru: lower resource revenue was compensated by stronger non-resource revenue, leaving the total revenue ratio broadly unchanged.
  - Chile: the decline in resource revenues—linked to mineral prices—has outweighed the rise in non-resource revenues.
- Drivers of revenue growth identified:
  - Buoyant economic performance supported by strong growth in global demand and commodity prices.
  - Domestic reforms that broadened the base and introduced new taxes.
  - Better tax administration.
  - Lower inequality coupled with a rise in consumption (favorable impact on the yield of direct taxes).
- Persistence of revenue increases:
  - If increases are driven by revenue-enhancing tax reforms (base broadening, higher tax rates, improvements in tax administration), they are likely to persist longer term.
  - If increases are driven purely by strong growth in economic activity and commodity prices, they could disappear if those supporting conditions fade.
- Empirical assessment of reforms (2008–13):
  - Four out of six countries (Chile, Colombia, Mexico, and Peru) introduced revenue-enhancing reforms since the global financial crisis; the estimated yield of these policy changes can explain part of the increase in revenue between 2007 and 2013.
  - Uruguay: no new reform since 2007; increase in revenue burden entirely due to buoyancy and stronger tax administration.
  - Brazil: increase in tax burden explained by buoyant payroll revenue (personal income taxes and social security contributions) amid rising salaries, and tax amnesty programs in 2009, 2013, and 2014 that boosted tax repayment, compensating for tax cuts implemented in 2012–14.
- Notable numeric/quantified items in reform descriptions:
  - Mexico 2013 net effect of tax package estimated at 1 percent of GDP.
  - Colombia 2010–14 combined yield of measures estimated at 0.4 percent of GDP per year on average during 2011–14.
  - Chile 2012–13 measures: net effect of the 2013 tax reform estimated at 1 percent of GDP.
  - Peru mining-related measures expected to yield 0.5 percent of GDP (IMF 2011b).
  - Brazil fiscal deficit increases related to measures estimated by IMF: 0.4 percentage point of GDP in 2012, 1 percentage point of GDP in 2013, and 1.1 percentage points of GDP in 2014 (IMF 2013a) — reported in the country summary for Brazil.

### Evolution of fiscal targets and rules (selected LA6 country summaries, 2008–14)
- Brazil: Evolution of fiscal targets and related operations (selected highlights)
  - 2008 target: 3.8% of GDP to GG, with 2.2% of GDP to CG, and 0.7% of GDP to SOEs. Target (over)met: 3.9% of GDP for GG.
  - 2009: target changed in May 2009 to 2.5% of GDP; primary surplus finished at 2% of GDP using revised adjustor.
  - 2010: 3.3% of GDP to GG; target met using 0.33% of GDP investment adjustor to compensate subnational shortfall.
  - 2012: 3.1% of GDP to GG; target met by using adjustor plus 0.3% of GDP from the SWF.
  - 2013: May 2013 target revised to 2.3% of GDP through use of the adjustor; final CG result 1.9% of GDP after using a 1.3 percent of GDP adjustor.
  - 2014: In February 2014 target revised to a nominal primary surplus representing 1.9% of GDP; reported primary balance of R–$32.5 bn, or –0.6% of GDP.
  - Recurring “Other Operations” and adjustments (selected):
    - Tax Amnesties reported across years (e.g., 0.21% of GDP in 2008; 0.27% in 2009; 0.25% in 2010; 0.54% in 2011; 0.38% in 2012; 0.76% in 2013; 0.58% in 2014).
    - Policy lending through public banks (examples): 0.71% of GDP in 2008 (net); 3.16% of GDP in 2009 (net); 2.69% of GDP in 2010 (net); 1.02% in 2011; 1.46% in 2012; 0.69% in 2013; 0.98% in 2014.
    - Deductions/adjustors related to PAC/PPI spending (examples): R$ 13.8bn in 2008; originally R$ 15.6bn PPI in 2009 then increased to include PAC (R$ 28bn); R$ 22.5bn in PAC deductible in 2010 (0.6% of final GDP); R$ 32bn in PAC in 2011; R$ 45.2bn in PAC in 2013 and augmenting adjustor by R$ 65.2bn in Apr. 2013; R$ 67bn in PAC in 2014 (1.3% of final GDP).
  - Coverage changes:
    - Petrobras permanently excluded from coverage in May 2009 (–0.5% of GDP).
    - Late 2010 GG target changed to exclude Eletrobras.

- Chile: Evolution of fiscal targets and rules (selected highlights)
  - 2008 target: 0.5% of GDP (CG structural balance). Result: –1% of GDP (target missed).
  - 2009 target: 0.0% of GDP. Result: –3.1% of GDP (target missed). Stimulus package of 2.9% of GDP announced in Jan. 2009.
  - 2010 target: 0.0% of GDP. Result: –2.1% of GDP (target missed). Rule de-facto temporarily suspended after Feb. 2010 earthquake; reconstruction expenditure 1% of GDP.
  - 2011 target: –1.8% of GDP. Result: –1% of GDP (target met).
  - 2012 target: –1.5% of GDP. Result: –0.4% of GDP (target met).
  - 2013 target: –1.0% of GDP. Result: –0.5% of GDP (target met).
  - 2014 target: –1.0% of GDP (N/A result reported).
  - Notable operations:
    - Jan. 2009 stimulus package of 2.9% of GDP.
    - Reconstruction expenditure of 1% of GDP in 2010 and subsequent years.

- Colombia: Evolution of fiscal targets and rules (selected highlights)
  - 2008 target: 2.6% of GDP (primary NFPS surplus). Result: 3.5% of GDP (overmet).
  - 2009 target: 1.9% of GDP. Result: 0.9% of GDP (missed).
  - 2010 target: 0.1% of GDP. Result: –0.1% of GDP (missed).
  - 2011 target: 0.0% of GDP. Result: 1.1% of GDP (overmet).
  - 2012 target: 0.9% of GDP. Result: 3.3% of GDP (overmet).
  - 2013 target: 1.9% of GDP. Result: 1.5% of GDP (missed).
  - 2014 target: 1.8% of GDP (start of new fiscal rule).
  - One-off and timing effects noted:
    - Delayed spending by local governments of 2011 and 2012 oil revenues influenced outcomes in 2012–13.

- Mexico: Evolution of fiscal targets and rules (selected highlights)
  - 2008 target: 0% of GDP (traditional balance). Result: –0.1% of GDP (deviation within a de-minimis margin).
  - 2009 target: 0% of GDP for traditional balance (net of PEMEX investment). Result: –0.2% of GDP (deviation within a de-minimis margin).
  - 2010 target: –0.7% of GDP for traditional balance (net of PEMEX investment). Result: –0.8% of GDP (deviation within a de-minimis margin). Permitted by Art. 17 of the FRL with justification by Congress.
  - 2011 target: –0.5% of GDP. Result: –0.6% of GDP (deviation within a de-minimis margin). Escape clause invoked in 2011.
  - 2012 target: –0.4% of GDP. Result: –0.6% of GDP (deviation within a de-minimis margin). Escape clause invoked in 2012.
  - 2013 target: 0.0% of GDP. Result: –0.3% of GDP (deviation within a de-minimis margin).
  - 2014 target: –1.5% of GDP for traditional balance (net of PEMEX investment). Result: –1.1% of GDP (met).
  - Notable off-budget and nonrecurring items:
    - Nonrecurring revenues and development banks’ net lending reported across years (examples: nonrecurring revenue 0.5% of GDP in 2008; increased to 1.3% of GDP in 2009; development banks around 0.3–0.5% of GDP in various years).

- Peru: Evolution of fiscal targets and rules (selected highlights)
  - 2008 target: NFPS deficit rule 1% of GDP; CG real spending growth rule 3%. Result: surplus of 2.4% GDP (deficit rule met; spending rule met).
  - 2009 target: NFPS deficit rule 2% of GDP; CG real spending growth rule revised to 10%. Result: deficit of 1.3% of GDP (deficit rule met; spending rule not met). Exceptional clause invoked in 2009.
  - 2010 target: NFPS deficit rule 2% of GDP; CG real spending growth rule revised to 8%. Result: deficit 0.3% of GDP (deficit rule met; spending rule revised met).
  - 2011–2014: gradual tightening back to surplus targets; 2013–2014 spending rule suspended; NFPS deficit rule tightened to 0% of GDP in 2013 and 2014 (surplus outcomes reported for 2013).
  - Temporary measures and contingency plans cited (e.g., temporary measures on the 2011/12 contingency plan 1% of average GDP).

- Uruguay: Evolution of fiscal targets and rules (selected highlights)
  - 2008 target: Consolidated public sector balance target –0.5% of GDP; net debt increase rule $275mn ($413mn with escape clause). Result: balance missed (–1.5% of GDP); net debt increase rule missed ($501mn). Escape clause triggered (energy crisis).
  - 2009 target: Consolidated public sector balance rule –2.0% of GDP; net debt increase rule $350mn (could be $700mn with escape clause). Result: balance met (–1.7% of GDP); net debt increase rule observed ($661mn) due to escape clause.
  - 2010 target: –1.2% of GDP; result met (–1.1% of GDP); net debt rule observed ($402mn) due to escape clause.
  - 2012 target: –1.4% of GDP; result missed (–2.1% of GDP); net debt rule (UI11,172mn) observed by invoking both escape clauses.
  - 2013 target: –2.1% of GDP; result missed (–2.4% of GDP); net debt rule observed only due to main escape clause.
  - 2014 target: –2.4% of GDP; result missed (–3.5% of GDP).
  - Notable operations and adjustments:
    - The escape clause was invoked multiple years due to droughts, energy sector impacts, and financial crisis effects.
    - The authorities put aside US$150 million of UTE’s profits in an Energy Stabilization Fund in 2010.
    - Currency of targets shifted (from USD to UI) in 2011, entailing relaxation of the rule.

*Source: Excerpt from FISCAL POLICY IN LATIN AMERICA – TECHNICAL APPENDIX (pdf content provided).*

### REFERENCES

### _sdn1506techapx - REFERENCES

### References listed
- Economic Commission for Latin America and the Caribbean (ECLAC), 2013, Fiscal Panorama of Latin America and the Caribbean—Tax Reform and Renewal of the Fiscal Covenant (Santiago: United Nations).
- International Monetary Fund, 2011a, “Colombia: 2011 Article IV Consultation Staff Report,” IMF Country Report No. 15/61 (Washington).
- ___________, 2011b, “Watching Out for Overheating,” Regional Economic Outlook, Western Hemisphere (Washington).
- ___________, 2012a, “Chile: 2012 Article IV Consultation Staff Report,” IMF Country Report No. 15/61 (Washington).
- ___________, 2012b, “Mexico: 2011 Article IV Consultation Staff Report,” IMF Country Report No. 15/61 (Washington).
- ___________, 2013a, “Brazil: 2013 Article IV Consultation Staff Report,” IMF Country Report No. 15/61 (Washington).
- ___________, 2013b, “Colombia: 2013 Article IV Consultation Staff Report,” IMF Country Report No. 15/61 (Washington).
- ___________, 2013c, “Mexico: 2013 Article IV Consultation Staff Report,” IMF Country Report No. 15/61 (Washington).
- ___________, 2013d, “Peru: 2012 Article IV Consultation Staff Report,” IMF Country Report No. 15/61 (Washington).
- ___________, 2013e, “Peru: 2013 Article IV Consultation Staff Report,” IMF Country Report No. 15/61 (Washington).
- Machado, Roberto, and Jose Zuloeta, 2012, “The Impact of the Business Cycle on Elasticities of Tax Revenue in Latin America,” IDB Working Paper Series No. IDB-WP-340 (Washington: Inter-American Development Bank).

*Source: _sdn1506techapx - REFERENCES*

---


_Source: https://www.imf.org/-/media/websites/imf/imported-publications/external/pubs/ft/sdn/2015/_sdn1506techapx.pdf_