## How to Develop and Implement a Medium-Term Fiscal Framework

_IMF How To Notes, September 26, 2024_

## Source details

**Canonical URL:** [How to Develop and Implement a Medium-Term Fiscal Framework](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)

## Other formats

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## Bibliographic details
- 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

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### Overview and purpose
- 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:
  - a fiscal strategy,
  - medium-term projections of key macroeconomic variables and fiscal aggregates,
  - ceilings on total expenditure to guide subsequent annual budgets.
- 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.

### Content scope and structure of the Note
- 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.

### Key findings and functions of MTFFs
- MTFFs are tools to:
  - promote fiscal discipline and sustainability,
  - improve transparency,
  - support better-informed fiscal decisions.
- Core elements include:
  - fiscal strategy,
  - medium-term projections of macroeconomic variables and fiscal aggregates,
  - expenditure ceilings to guide annual budgets.
- Benefits highlighted:
  - clearer understanding of policy impact, trade-offs, and risks,
  - enhanced transparency and accountability,
  - increased confidence in government fiscal management when plans are clear and effectively implemented.

### Institutional and technical arrangements (high-level)
- 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.

### Challenges and country examples
- 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.

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## Content in this bundle

- **How to Develop and Implement a Medium-Term Fiscal Framework**
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_Source: 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_