Chile: Technical Assistance Report-Fiscal Considerations in Managing Stabilization Funds
IMF Staff Country Reports, July 7, 2023
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- Chile: Technical Assistance Report-Fiscal Considerations in Managing Stabilization Funds
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Bibliographic details
- Published: July 7, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400249037.002
Summary overview
- Chile’s strong fiscal framework has served the country well.
- Cross-country experience shows that an adequate buffer in a stabilization fund can facilitate governments’ response to shocks.
- Rebuilding fiscal buffers in a holistic framework can help Chile better manage tail risks.
- Overall, the pace of building buffers should be tailored to economic conditions.
Quantitative model findings
- The quantitative models suggest that keeping debt well below the current prudent ceiling on central government gross debt at 45 percent of gross domestic product is appropriate.
- Rebuilding buffers can follow two broad approaches implied by the models:
- Reduce public debt to give space for future borrowing in adverse times.
- Accumulate liquid assets to rebuild fiscal buffers.
Policy recommendations and fiscal considerations
- Fiscal efforts to achieve a broadly balanced fiscal position are an important way to rebuild buffers.
- The government should avoid borrowing more debt at high interest rates to save assets in the stabilization fund.
- Use of stabilization funds should be informed by cross-country experience and tailored to Chile’s specific risks and economic conditions.
Key statistics and publication metadata (as presented)
- Pages: 57
- Volume: 2023
- Issue: 249
- Series: Country Report No. 2023/249
- DOI: https://doi.org/10.5089/9798400249037.002
- Stock No: 1CHLEA2023004
- ISBN: 9798400249037
- ISSN: 1934-7685
- Publication date on landing page: July 7, 2023
- Subject tags listed: Environment, Fiscal policy, Fiscal risks, Fiscal stance, International organization, Monetary policy, Natural disasters, Public debt, Public financial management (PFM)
- Keywords listed: Fiscal risks, Fiscal stance, Global, IMF's Fiscal Affairs Department, Mexico budget revenues stabilization fund, Natural disasters, public treasury, size of stabilization funds, support fund, Tail risk
International Monetary Fund. Fiscal Affairs Dept. "Chile: Technical Assistance Report-Fiscal Considerations in Managing Stabilization Funds", IMF Staff Country Reports 2023, 249 (2023), accessed 9/4/2026, https://doi.org/10.5089/9798400249037.002.
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- 1chlea2023004