Brazil: Technical Assistance Report-Supporting Implementation of the Expenditure Rule Through Public Financial Management Reforms
IMF Staff Country Reports, October 4, 2017
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- Brazil: Technical Assistance Report-Supporting Implementation of the Expenditure Rule Through Public Financial Management Reforms
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Bibliographic details
- Published: October 4, 2017
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484321218.002
Executive summary and purpose
- The report discusses recommendations for supporting implementation of the expenditure rule through public financial management reforms in Brazil.
- Primary objective: address rigidities in the budget and create more fiscal space to support the expenditure rule.
Key findings on budget rigidities and needed processes
- Rigidities in the budget limit flexibility and fiscal space.
- Authorities need to establish processes to:
- build flexibility; and
- improve efficiency.
- Specific areas identified for review include:
- mandatory expenditures; and
- indexation practices.
Recommended reforms and policy measures
- Review mandatory expenditures and indexation practices to reduce automatic growth in expenditures.
- Implement a rolling program of spending reviews focused on large and fast-growing programs.
- Introduce efficiency dividends on ministries’ operational expenses to incentivize cost savings.
- Begin developing a medium-term budget framework to support strategic decision making and align annual budgets with longer-term priorities.
Implementation priorities
- Prioritize reforms that increase budget flexibility without undermining core service delivery.
- Sequence reforms to pair expenditure reviews with the introduction of a medium-term budget framework.
- Apply efficiency dividends and operational spending reforms across ministries to generate recurrent savings.
Thematic scope (as presented)
- Budget planning and preparation
- Expenditure and expenditure policy
- Fiscal policy and fiscal stance
- Macroeconomic and fiscal forecasts
- Public financial management (PFM)
Source: Brazil: Technical Assistance Report-Supporting Implementation of the Expenditure Rule Through Public Financial Management Reforms, International Monetary Fund, October 4, 2017.
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- Country Report