The module of the Fiscal Stress Test is an Excel-based tool that allows users to build scenarios of the impact of COVID-19 on the economy and the budget.


What does the tool do?
  • Quickly estimate the impact of different intensities and lengths of social containment measures on macroeconomic and fiscal outcomes in the country.
  • Customize the response to the country's data and local COVID-19 impact.
  • Model the impacts of the pandemic on individual sectors of the economy and identify how these impacts will feed into revenue, expenditure, the fiscal balance, and debt.
  • Model the longer-term scarring of the COVID-19 pandemic through implications on labor market and capital stocks.
  • Prepare charts and tables that then also be used for policy and advice and as a basis for broader fiscal risk analysis and reporting (including in a fiscal risk statement).
Why analyze these risks?

The COVID-19 pandemic has had an unprecedented negative impact on economies across the world. The potential impact of the pandemic on macro-fiscal outcomes is still highly uncertain and continues to change, exposing governments to considerable uncertainty and risk in fiscal projections. As the pandemic continues to unfold, governments are looking to assess and quantify this uncertainty, and to ensure buffers and contingencies exist to manage the uncertain fiscal path. The COVID-19 module of the Fiscal Stress Test was developed to aid in the preparation of these scenarios.

How can the tool support fiscal policymaking?

The tool allows users to rapidly prepare macro-fiscal scenarios under different combinations of lockdown stringency and length. These scenarios have been used during the preparation of budgets to understand the scale of the fiscal impact of COVID-19 and to design mitigation measures and assign buffers and contingencies to manage the fiscal risk.

Linkages to other IMF fiscal risk and macro-fiscal analytical tools

The macro-fiscal scenarios and parameters produced in the COVID-19 module of the Fiscal Stress Test can be used as the basis for assessing vulnerabilities using the SOE Health Check and the SOE Stress Test Tools. This allows the preparation of consistent and detailed fiscal stress scenarios encompassing the wider public sector.