Assessing Fiscal Space: An Update and Stocktaking
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- Assessing Fiscal Space: An Update and Stocktaking
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Bibliographic details
- Published: June 15, 2018
Purpose and scope
- Reviews the experience with the fiscal space assessment framework that was piloted during 2017–18.
- Framework developed in response to the need to provide a more systematic approach to assessing fiscal space in the Fund’s surveillance.
- Designed to inform the availability of fiscal space over a 3 to 4 year horizon for discretionary action, not the optimality of its use.
Definition and framework
- Fiscal space narrowly defined as the room for undertaking discretionary fiscal policy relative to existing plans without endangering market access and debt sustainability.
- A new four-stage framework for assessment was proposed in 2016.
- The framework and operational definition were discussed informally by the Board in June, and a Board paper “Assessing Fiscal Space: An Initial Consistent Set of Considerations” incorporating Directors’ views was published in December.
Pilot and coverage
- The framework was piloted in the Article IV consultations of 34 advanced economies and emerging markets.
- Pilot coverage comprised almost 80 percent of global GDP in PPP terms.
Key considerations emphasized
- Availability of fiscal space does not necessarily mean that it should be used or should not be further expanded.
- The tool is intended to inform the availability of discretionary fiscal space over a 3 to 4 year horizon.
Assessing Fiscal Space: An Update and Stocktaking, June 15, 2018 — https://www.imf.org/en/publications/policy-papers/issues/2018/06/15/pp041118assessing-fiscal-space
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- Policy Paper