Selected Issues Papers
IMF Selected Issues Papers are prepared by IMF staff as background documentation for periodic consultations with member countries.
2025
March 31, 2025
South Africa's Fiscal Framework: Challenges and Options for Reform
Description: South Africa’s public debt has tripled since the global financial crisis and is not expected to stabilize over the medium term under staff’s baseline. Cross-country evidence suggests that fiscal rules anchored in debt ceilings can be helpful in supporting fiscal adjustments aimed at reducing public debt and bolstering policy credibility. Design features such as institutional coverage, statutory base, correction mechanisms, and flexibility provisions can make the rules more credible and durable, and formal enforcement mechanism and independent institutions can strengthen their compliance. Strengthening South Africa’s fiscal framework by introducing a debt anchor and a credible operational fiscal rule in line with international best practice could help support the authorities’ fiscal objectives and safeguard debt sustainability.
March 26, 2025
Public Education in Belgium: Improving Outcome While Reducing Cost
Description: Educational outcomes in Belgium are comparable to peers but achieved at a higher cost. The public wage bill for education is higher than in peers, reflecting smaller student-to-teacher ratios and less teaching time. Yet, Belgium experiences teacher shortages. Reforms should aim at increasing the efficiency of public spending on education while achieving greater equality of educational outcomes and a lower skills mismatch. This would help increase the employment rate, reduce the need for firms to provide training to upgrade skills, boost productivity, and increase the creation and diffusion of innovation. Ultimately, these reforms would improve potential growth.
March 26, 2025
Increasing Public Investment, Fostering Digitalization, and Supporting the Green Transition: A Difficult Challenge
Description: Public investment in Belgium has been low historically. Against severe budgetary constraints and fiscal consolidation requirements, public investment should however be preserved or, ideally, increased to mitigate the demand impact of consolidation and enhance productive capacity to lift potential growth. Furthermore, there is growing need for strategic public investment to facilitate digitalization and the green transition. This paper examines these intertwined challenges and proposes policy measures to help bolster public investment.
March 26, 2025
Improving the Efficiency of Public Investment in Infrastructure in Belgium: Belgium
Description: Against a backdrop of constrained fiscal space, Belgium faces considerable investment needs. Improving infrastructure governance processes can enhance investment efficiency, achieving more “bang” for each investment “buck”. This paper analyzes public investment management practices in Belgium, highlighting several areas for improvement by the federal and regional governments. The findings indicate an absence of clear infrastructure strategies, weak practices for project preparation (including project appraisal, selection and approval processes), fragmented governance, and an absence of coordination within and between entities. The “gatekeeping” role of the Ministry of Finance, common in most advanced economies, is largely absent in each of the entities in Belgium’s federal state. Notwithstanding these areas for improvement, there are examples of good practices in individual agencies, and a number of promising reform initiatives are underway. The paper recommends taking a strategic and coordinated approach to investment planning, establishing standardized project preparation practices, enhancing coordination between federated entities and with the federal entity, and strengthening the role of departments of finance/budget in the public investment process. Together, these steps can improve infrastructure governance and support enhanced investment efficiency.
March 26, 2025
Firm Dynamics and Firm-Level Total Factor Productivity in Belgium: Belgium
Description: Belgium’s total factor productivity (TFP) growth slowdown since the late 1990s has been worse than peers’ despite significant spending on innovation. This is largely explained by subdued business dynamics, insufficient firm access to financing, labor and capital misallocation, and the predominance of small firms. Further product-market reforms to reduce barriers to entry and lower exit costs are needed to raise TFP. Reforming the wage-setting mechanism to better align wage and productivity developments would improve labor allocation. Deepening the European single market and advancing the capital market union would contribute to higher Belgian firm productivity and facilitate firm scale up.
March 7, 2025
Estimating Fiscal Multiplier for Qatar: Qatar
Description: Econometric results suggest that Qatar’s strong capital spending multiplier became less impactful as the stock of capital rose to a high level, likely as the marginal impact declined. This supports Qatar’s strategy to shifts the State’s role to an enabler of private sector-led growth, focusing on expenditure to support build human capital and implementation of broader reform guided by the Third National Development Strategy.
March 7, 2025
Building a Knowledge-Based Economy to Boost Growth: The Role of Export Diversification in Qatar
Description: Motivated by Qatar’s Third National Development Strategy, this note discusses ingredients for boosting export diversification and growth potential. Drawing on cross-country experiences and empirical analyses, we shed light on how successful policies supported building human capital and economic complexity, the type of strategy that could best suite Qatar's circumstances, and pitfalls to avoid.
March 7, 2025
Artificial Intelligence in Qatar: Assessing the Potential Economic Impacts
Description: Qatar has been actively preparing to embrace the transformative potential of artificial intelligence (AI), allowing it to lead its Emerging Market peers in AI readiness. Qatar’s AI exposure has increased significantly over the years, and increasing AI adoption is assessed to yield more opportunities than risks for the country’s labor force, thanks to the private sector’s contribution in increasing jobs that are more likely to benefit from AI-driven productivity gains. Scenario analyses suggest that increasing AI adoption, supported by policy reforms to boost human capital, innovation and domestic knowledge spillovers, could generate sizeable labor productivity gains over the medium term.
March 7, 2025
Financial Conditions and Their Growth Implications for Qatar: Qatar
Description: This paper develops a Financial Conditions Index (FCI) for Qatar and uses the Growth-at-Risk (GaR) framework to examine the impact of financial conditions on Qatar’s non-hydrocarbon growth. The analysis shows that the FCI is an important leading indicator of Qatar’s non-hydrocarbon growth, highlighting its predictive potential for future economic performance. The GaR framework suggests that overall, the current downside risks to Qatar’s baseline non-hydrocarbon growth projections are relatively mild.
March 5, 2025
Transforming the Future: The Impact of Artificial Intelligence in Korea
Description: This paper examines the economic impact of Artificial Intelligence (AI) in Korea. Korea is among the global frontrunners in AI adoption, with higher adoption rates among larger, younger, and technologically advanced firms. AI holds the promise for boosting productivity and output, though the effects are more pronounced among larger and mature Korean firms. About half of jobs are exposed to AI, with higher exposures among female, younger, more educated, and higher income workers. Korea’s strong innovation and digital infrastructure highlights its AI readiness, while enhancing labor market flexibility and social safety nets are essential to fully harness AI’s potential.