Inflation Indexation in Public Finances: A Global Dataset on Current Practices

IMF Working Papers, December 22, 2023

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Canonical URL: Inflation Indexation in Public Finances: A Global Dataset on Current Practices

New global dataset on current practices for four budget items in terms of indexation to the price level and other nominal variables.
Four budget items covered:
- personal income tax brackets
- pensions
- social assistance programs
- public wages
Data sources:
- documents of select multilateral organizations
- governments
- related literature
- a survey among IMF country desks of 190 country-members
Pages: 43
Volume: 2023
Issue: 264
Series: Working Paper No. 2023/264
DOI: https://doi.org/10.5089/9798400261466.001
Stock No: WPIEA2023264
ISBN: 9798400261466
ISSN: 1018-5941

Indexation policies vary significantly across economies.
Cross-cutting trends identified:
- Indexation is more common on pension and social grants than on taxes.
- Indexation falls with the degree of economic development.
Applications and empirical exercises included in the paper:
- An accounting exercise illustrating the impacts of indexation on fiscal outcomes during episodes of inflation surprises.
- An analysis of the association between the overall degree of indexation combining the four budget items and inflation persistence.

Subject: Expenditure, Labor, Prices
Keywords: Africa, Asia and Pacific, Europe, Fiscal Insititutions, Fiscal Policy, Global, IMF country desk, impacts of indexation, Indexation, indexation policy, indexation practice, Inflation, inflation Indexation, Pension spending, Pensions, price level, Social assistance spending, Sub-Saharan Africa, Wages

Inflation Indexation in Public Finances: A Global Dataset on Current Practices, IMF Working Papers 2023, 264 (2023).