Fiscal Monitor, October 2018: Managing Public Wealth

Fiscal Monitor, October 10, 2018

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Public sector balance sheets bring together all accumulated assets and liabilities that the government controls, including public corporations, natural resources, and pension liabilities.
They provide a broader fiscal picture beyond debt and deficits by accounting for the entirety of what the state owns and owes.
Most governments do not provide such transparency, thereby avoiding the additional scrutiny it brings.
Better balance sheet management enables countries to increase revenues, reduce risks, and improve fiscal policymaking.
There is some empirical evidence that financial markets are increasingly paying attention to the entire government balance sheet and that strong balance sheets enhance economic resilience.

The issue presents a new database with comprehensive estimates of public sector assets and liabilities for a sample of 31 countries.
The sample covers 61 percent of the global economy.
The database provides tools to analyze and manage public wealth.

Assets are worth US$101 trillion or 219 percent of GDP in the sample.
Public corporation assets account for 120 percent of GDP in the sample.
Natural resources average 110 percent of GDP among the large natural-resource-producing countries.
General government public debt comprises 94 percent of GDP for these countries.
Total public sector liabilities equal 198 percent of GDP, which includes 46 percent of GDP in already accrued pension liabilities.

Recognizing public assets does not negate vulnerabilities associated with the standard measure of general government public debt.
Once governments understand the size and nature of public assets, they can start managing them more effectively.
Revenue gains from nonfinancial public corporations and government financial assets alone could be as high as 3 percent of GDP a year, equivalent to annual corporate tax collections across advanced economies.
Considerable additional gains could be realized from government nonfinancial assets.
Public assets matter for financial reasons, for improving service delivery, and for preventing misuse of resources that often results from a lack of transparency.

International Monetary Fund. Fiscal Monitor, October 2018: Managing Public Wealth