{
  "title": "How to Develop and Implement a Medium-Term Fiscal Framework",
  "publication": "IMF How To Notes, September 26, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/imf-how-to-notes/issues/2024/09/27/how-to-develop-and-implement-a-medium-term-fiscal-framework-555581",
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  "summary": "This Note provides guidance on developing and implementing a medium-term fiscal framework (MTFF). MTFFs aim to promote fiscal discipline and sustainability, transparency, and better-informed fiscal decisions.",
  "sections": [
    {
      "heading": "Overview and purpose",
      "content": "- Provides guidance on developing and implementing a medium-term fiscal framework (MTFF).\n- MTFFs aim to promote fiscal discipline and sustainability, transparency, and better-informed fiscal decisions.\n- An MTFF comprises institutional arrangements for prioritizing, presenting, reporting, and managing fiscal aggregates — revenue, expenditure, balance, and debt — generally over a three-to-five-year period.\n- An MTFF incorporates:\n  - a fiscal strategy,\n  - medium-term projections of key macroeconomic variables and fiscal aggregates,\n  - ceilings on total expenditure to guide subsequent annual budgets.\n- By introducing a medium-term perspective into fiscal and budgetary decision making, MTFFs provide a clearer understanding of the impact, trade-offs, and risks of policy choices.\n- MTFFs contribute to enhancing transparency and accountability by communicating the government’s medium-term fiscal goals, policies, and fiscal performance.\n- Clarity on medium-term fiscal plans and on their effective implementation can bolster confidence in the government’s ability to manage its finances prudently and competently."
    },
    {
      "heading": "Content scope and structure of the Note",
      "content": "- Guidance on how to design an MTFF.\n- Discussion of institutional and technical arrangements needed to support implementation.\n- Discussion of key challenges to MTFF development and implementation.\n- Presentation of country examples from across the globe by income group.\n- Concludes with lessons learned."
    },
    {
      "heading": "Key findings and functions of MTFFs",
      "content": "- MTFFs are tools to:\n  - promote fiscal discipline and sustainability,\n  - improve transparency,\n  - support better-informed fiscal decisions.\n- Core elements include:\n  - fiscal strategy,\n  - medium-term projections of macroeconomic variables and fiscal aggregates,\n  - expenditure ceilings to guide annual budgets.\n- Benefits highlighted:\n  - clearer understanding of policy impact, trade-offs, and risks,\n  - enhanced transparency and accountability,\n  - increased confidence in government fiscal management when plans are clear and effectively implemented."
    },
    {
      "heading": "Institutional and technical arrangements (high-level)",
      "content": "- Institutional arrangements prioritize, present, report, and manage fiscal aggregates.\n- Technical arrangements support medium-term projections and setting of expenditure ceilings.\n- Implementation relies on aligning MTFF ceilings and projections with subsequent annual budget processes."
    },
    {
      "heading": "Challenges and country examples",
      "content": "- The Note discusses key challenges to MTFF adoption and implementation.\n- Country examples are presented across income groups to illustrate practical applications and variations in MTFF design and implementation.\n\n---\n\n Content in this bundle\n\n- How to Develop and Implement a Medium-Term Fiscal Framework\n  - How to Develop and Implement a Medium-Term Fiscal Framework (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - How to Develop and Implement a Medium-Term Fiscal Framework (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/imf-how-to-notes/issues/2024/09/27/how-to-develop-and-implement-a-medium-term-fiscal-framework-555581"
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    "Authors: Teresa R Curristine, Isabell Adenauer, Virginia Alonso-Albarran, John Grinyer, Koon Hui Tee, Claude P Wendling, Delphine Moretti",
    "Published: September 26, 2024",
    "Series: IMF How To Notes",
    "DOI: https://doi.org/10.5089/9798400289668.061",
    "Provides guidance on developing and implementing a medium-term fiscal framework (MTFF).",
    "MTFFs aim to promote fiscal discipline and sustainability, transparency, and better-informed fiscal decisions.",
    "An MTFF comprises institutional arrangements for prioritizing, presenting, reporting, and managing fiscal aggregates — revenue, expenditure, balance, and debt — generally over a three-to-five-year period.",
    "An MTFF incorporates:",
    "By introducing a medium-term perspective into fiscal and budgetary decision making, MTFFs provide a clearer understanding of the impact, trade-offs, and risks of policy choices.",
    "MTFFs contribute to enhancing transparency and accountability by communicating the government’s medium-term fiscal goals, policies, and fiscal performance.",
    "Clarity on medium-term fiscal plans and on their effective implementation can bolster confidence in the government’s ability to manage its finances prudently and competently.",
    "Guidance on how to design an MTFF.",
    "Discussion of institutional and technical arrangements needed to support implementation.",
    "Discussion of key challenges to MTFF development and implementation.",
    "Presentation of country examples from across the globe by income group.",
    "Concludes with lessons learned.",
    "MTFFs are tools to:",
    "Core elements include:",
    "Benefits highlighted:",
    "Institutional arrangements prioritize, present, report, and manage fiscal aggregates.",
    "Technical arrangements support medium-term projections and setting of expenditure ceilings.",
    "Implementation relies on aligning MTFF ceilings and projections with subsequent annual budget processes.",
    "The Note discusses key challenges to MTFF adoption and implementation.",
    "Country examples are presented across income groups to illustrate practical applications and variations in MTFF design and implementation.",
    "**How to Develop and Implement a Medium-Term Fiscal Framework**"
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