IMF Fiscal Monitor -- Now Is the Time: Fiscal Policies for Sustainable Growth -- April 2015
Fiscal Monitor, April 8, 2015
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Bibliographic details
- Published: April 8, 2015
- Series: Fiscal Monitor
Overview and main findings
- Fiscal risks remain significant in both advanced and emerging market and developing economies.
- Fiscal policy continues to play an essential role in building confidence and, where appropriate, sustaining aggregate demand.
- Strengthening fiscal frameworks—particularly to manage public finance risks and ensure debt sustainability—must be part of the fiscal policy response.
- Countries should seize the moment created by lower oil prices to start the process of energy taxation and energy subsidy reform.
- Fiscal policy can contribute substantially to macroeconomic stability through the workings of automatic stabilizers, and by doing so can unlock significant growth dividends.
Recent developments and outlook (summary)
- A moderate recovery continues in advanced economies, driven by lower oil prices, continued accommodative monetary policy, and more moderate fiscal adjustment.
- High public and private debt levels remain headwinds to growth and debt sustainability in some advanced economies.
- Inflation is below target by a large margin in many countries, complicating the task of reducing high public debt levels.
- Growth in emerging economies is softening and financial and exchange rate volatility has increased public financing costs for some of them.
- Sharply lower oil and commodity revenues have created challenges for exporting countries.
- In this challenging environment, fiscal policy's supportive role is emphasized alongside the need to strengthen fiscal frameworks.
Fiscal impact of lower oil prices and policy priorities
- Lower oil prices have significant fiscal impacts across country groups, creating both opportunities and risks.
- Priority policy actions recommended:
- Strengthen fiscal frameworks to manage public finance risks and ensure debt sustainability.
- Start energy taxation and energy subsidy reform while lower oil prices provide political and economic space.
- Allow automatic stabilizers to function effectively to support macroeconomic stability without unduly raising marginal income tax rates or the generosity of social transfers.
Fiscal stabilization and automatic stabilizers (Chapter 2 key points)
- Two main findings:
- Fiscal policy is often used to reduce output volatility, especially in advanced economies.
- A more stable macroeconomic environment resulting from fiscal stabilization is conducive to higher average growth.
- Automatic stabilizers (mainly tax payments and social transfers) can contribute substantially to output stabilization.
- Policymakers rarely let automatic stabilizers operate freely; revenue windfalls from stronger growth tend to be spent, raising deficits and public debts.
- Avoiding procyclical fiscal measures would benefit both stability and growth.
- The chapter explores options to enhance automatic stabilizers without unduly raising marginal income tax rates or the generosity of social transfers.
Policy implications and recommendations
- Use the fiscal space created by lower oil prices to implement energy taxation and reform energy subsidies.
- Strengthen fiscal frameworks to better manage fiscal risks and preserve debt sustainability amid low growth and low inflation in some advanced economies and increased volatility in emerging markets.
- Enhance the effectiveness of automatic stabilizers and avoid procyclical fiscal measures to reduce output volatility and support medium-term growth.
IMF Fiscal Monitor -- Now Is the Time: Fiscal Policies for Sustainable Growth -- April 2015
Content in this bundle
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- Now Is the Time: Fiscal Policies for Sustainable Growth, Fiscal Monitor, April 2015
- fm1501pdf
- Assumptions and Conventions, Fiscal Monitor, April 2015
- IMF Executive Board Discussion Summary, Fiscal Monitor, April 2015
- Chapter 1. Recent Fiscal Developments and Outlook, Fiscal Monitor, April 2015
- Chapter 2. Can Fiscal Policy Stabilize Output?, Fiscal Monitor, April 2015
- Country Abreviations, Fiscal Monitor, April 2015
- Executive Summary, Fiscal Monitor, April 2015
- Executive Summary, Fiscal Monitor, April 2015
- Further Information and Data, Fiscal Monitor, April 2015
- Glossary, Fiscal Monitor, April 2015
- Preface, Fiscal Monitor, April 2015
- Selected Topics, Fiscal Monitor, April 2015
- Methodological and Statistical Appendix, Fiscal Monitor, April 2015
- Дивиденды роста от стабилизирующей налогово-бюджетной политики; Ксавьер Дебрун; 8 апреля 2015 года
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- Аналитическое резюме - Бюджетный вестник, апрель 2015 года
- Monitor Fiscal - Resumen Ejecutivo; Abril 2015
- Fmdata
References
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- Now Is the Time! Use Fiscal Policy to Support Sustainable Growth
- Measure to Measure: The Effect of Fiscal Policy on Growth and Stability, Blog by Vitor Gaspar, April 15, 2015
- Blog: Oil Prices and Public Finances: A Double-Edged Sword, April 15, 2015
- Blog: Growth Dividend from Stabilizing Fiscal Policies, April 8, 2015
- Transcript of the 2015 Fiscal Monitor Press Briefing
- Transcript of a Conference Call on the Fiscal Monitor Analytical Chapter: “Can Fiscal Policy Stabilize Output?”
- Fiscal Monitor Reports
- FM Data
- [FM Data on IMF Data Mapper® v3
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