{ "title": "Upgrading Fiscal Frameworks in Asia-Pacific", "publication": "Departmental Papers, September 16, 2024", "sourceUrl": "https://www.imf.org/en/publications/departmental-papers-policy-papers/issues/2024/09/13/upgrading-fiscal-frameworks-in-asia-pacific-552523", "canonical": "https://www.imf.org/en/publications/departmental-papers-policy-papers/issues/2024/09/13/upgrading-fiscal-frameworks-in-asia-pacific-552523", "overlayPath": "/en/publications/departmental-papers-policy-papers/issues/2024/09/13/upgrading-fiscal-frameworks-in-asia-pacific-552523/index.md", "summary": "This paper seeks to guide the reform of fiscal frameworks in Asia-Pacific in the context of calls for a more active fiscal policy in a shock-prone world.", "sections": [ { "heading": "Overview", "content": "- Objective: Guide the reform of fiscal frameworks in Asia-Pacific amid calls for a more active fiscal policy in a shock-prone world.\n- Context: Cost of fiscal support is large; fiscal frameworks and fiscal rules are being tested by a sharp increase in debt, high interest, and weaker growth prospects.\n- Long-term stressors highlighted: aging populations, climate change, and the need to deliver on the sustainable development goals." }, { "heading": "Key findings", "content": "- Countercyclicality and responses to shocks:\n - After the global financial crisis, fiscal policy in Asia-Pacific became more countercyclical and stronger than in other regions—especially in advanced economies.\n - The degree of countercyclicality has been asymmetric, with larger responses during periods of weak growth and in response to large shocks—the global financial crisis and the pandemic.\n - Responses to the pandemic were large and used a wide range of tools; fiscal and monetary policy complemented each other in response to large shocks.\n- Debt dynamics:\n - Public debt has been rising persistently across most countries in Asia-Pacific.\n - Drivers identified: declining growth and rising deficits—particularly after the global financial crisis for advanced economies and after the pandemic for emerging market and low income countries.\n- Fiscal frameworks and performance:\n - Fiscal rules: usually focus on debt and budget balances and are set by law but tend to lack well-specified enforcement mechanisms or escape clauses.\n - Compliance with rules has worsened following the pandemic; Asia-Pacific countries show larger deviations relative to other regions compared with outturns before the pandemic.\n - Medium-term fiscal frameworks (MTFFs): adoption has increased, but forward guidance has been hampered by the lack of binding targets and ex-post analysis.\n - MTFFs do not seem to have produced better macro-fiscal forecasts, partly due to weak capacity and enforcement, lack of integration with the annual budget, and exposure to shocks—with risk analysis mostly limited to qualitative discussions." }, { "heading": "Proposed reforms and recommendations", "content": "- Adopt a comprehensive, risk-based approach to public finances.\n- Strengthen medium-term orientation of fiscal policy by:\n - Implementing credible medium-term fiscal plans.\n - Linking fiscal rules to the medium-term strategy and the annual budgets.\n - Increasing reliance on fiscal councils.\n- Broaden the view of the public sector:\n - Recognize that fiscal policy is conducted through multiple channels; assess and manage vulnerabilities across those channels.\n - Significantly improve fiscal statistics.\n- Address aging and climate change by:\n - Assessing large intergenerational trade-offs.\n - Reporting on long-term debt dynamics.\n - Developing green medium-term fiscal frameworks that incorporate the effects of climate change and climate policies." }, { "heading": "Publication and metadata (as stated)", "content": "- Authors: Enrique Flores, Pranav Gupta, Yinqiu Lu, Paulo A Medas, Dinar Prihardini, Hoda Selim, Weining Xin, Masafumi Yabara\n- Date: September 16, 2024\n- Pages: 62\n- Volume: 2024\n- Issue: 008\n- Series: Departmental Paper No 2024/008\n- DOI: https://doi.org/10.5089/9798400284915.087\n- Stock No: DPEA2024UFFAP\n- ISBN: 9798400284915\n- ISSN: 2616-5333\n- Subject tags (as provided): Expenditure, Financial crises, Fiscal governance, Fiscal policy, Fiscal rules, Global financial crisis of 2008-2009, Public debt\n- Keywords (as provided): automatic stabilizers, Climate Change, Fiscal Frameworks, Fiscal Rules, Medium-term Fiscal Frameworks, Population Aging, Public Debt\n\nUpgrading Fiscal Frameworks in Asia-Pacific, Departmental Papers 2024, 008 (2024), Enrique Flores et al., published September 16, 2024.\n\n---\n\n Content in this bundle\n\n- Departmental Paper\n - Departmental Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Departmental Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/departmental-papers-policy-papers/issues/2024/09/13/upgrading-fiscal-frameworks-in-asia-pacific-552523" } ], "bullets": [ "[Markdown version](/en/publications/departmental-papers-policy-papers/issues/2024/09/13/upgrading-fiscal-frameworks-in-asia-pacific-552523/index.md)", "[Structured JSON version](/en/publications/departmental-papers-policy-papers/issues/2024/09/13/upgrading-fiscal-frameworks-in-asia-pacific-552523/index.json)", "[Bundle manifest](/en/publications/departmental-papers-policy-papers/issues/2024/09/13/upgrading-fiscal-frameworks-in-asia-pacific-552523/bundle-manifest.json)", "Authors: Enrique Flores, Pranav Gupta, Miss Yinqiu Lu, Paulo A Medas, Dinar Prihardini, Hoda Selim, Weining Xin, Masafumi Yabara", "Published: September 16, 2024", "Series: Departmental Papers", "DOI: https://doi.org/10.5089/9798400284915.087", "Objective: Guide the reform of fiscal frameworks in Asia-Pacific amid calls for a more active fiscal policy in a shock-prone world.", "Context: Cost of fiscal support is large; fiscal frameworks and fiscal rules are being tested by a sharp increase in debt, high interest, and weaker growth prospects.", "Long-term stressors highlighted: aging populations, climate change, and the need to deliver on the sustainable development goals.", "Countercyclicality and responses to shocks:", "Debt dynamics:", "Fiscal frameworks and performance:", "Adopt a comprehensive, risk-based approach to public finances.", "Strengthen medium-term orientation of fiscal policy by:", "Broaden the view of the public sector:", "Address aging and climate change by:", "Authors: Enrique Flores, Pranav Gupta, Yinqiu Lu, Paulo A Medas, Dinar Prihardini, Hoda Selim, Weining Xin, Masafumi Yabara", "Date: September 16, 2024", "Pages: 62", "Volume: 2024", "Issue: 008", "Series: Departmental Paper No 2024/008", "DOI: https://doi.org/10.5089/9798400284915.087", "Stock No: DPEA2024UFFAP", "ISBN: 9798400284915", "ISSN: 2616-5333", "Subject tags (as provided): Expenditure, Financial crises, Fiscal governance, Fiscal policy, Fiscal rules, Global financial crisis of 2008-2009, Public debt", "Keywords (as provided): automatic stabilizers, Climate Change, Fiscal Frameworks, Fiscal Rules, Medium-term Fiscal Frameworks, Population Aging, Public Debt", "**Departmental Paper**" ], "related": [ { "title": "Departmental Paper", "role": "paper", "sourceUrl": "https://www.imf.org/-/media/files/publications/dp/2024/english/dpea2024uffap.pdf", "summary": { "path": "/-/media/files/publications/dp/2024/english/dpea2024uffap.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/dp/2024/english/dpea2024uffap.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/departmental-papers-policy-papers/issues/2024/09/13/upgrading-fiscal-frameworks-in-asia-pacific-552523/index.md", "json": "/en/publications/departmental-papers-policy-papers/issues/2024/09/13/upgrading-fiscal-frameworks-in-asia-pacific-552523/index.json", "bundleManifest": "/en/publications/departmental-papers-policy-papers/issues/2024/09/13/upgrading-fiscal-frameworks-in-asia-pacific-552523/bundle-manifest.json" }, "generatedAtUtc": "2026-09-16T17:59:19.337Z" }