Securing Fiscal Discipline and Credibility in WAEMU: WAEMU
Selected Issues Papers, May 17, 2024
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- Securing Fiscal Discipline and Credibility in WAEMU: WAEMU
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Bibliographic details
- Authors: Ljubica Dordevic, Olivia Y Ibrahim
- Published: May 17, 2024
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798400275395.018
Key findings
- Fiscal consolidation and the reintroduction of the WAEMU fiscal framework is crucial for maintaining debt sustainability, external viability, and financial stability.
- The 3 and 70 percent of GDP deficit and debt ceilings envisaged by the expired rule remain appropriate.
- Addressing the stock-flow adjustments will help rebuild fiscal buffers.
- Convergence to a fiscal deficit of 3 percent of GDP should be ensured by 2025— barring exceptional circumstances— with focus on domestic revenue mobilization, while controlling expenditure.
Policy recommendations
- Reintroduce the WAEMU fiscal framework with the 3 percent of GDP deficit ceiling and the 70 percent of GDP debt ceiling.
- Address stock-flow adjustments to rebuild fiscal buffers.
- Ensure convergence to a fiscal deficit of 3 percent of GDP by 2025, except under exceptional circumstances, emphasizing domestic revenue mobilization and expenditure control.
- Revamp the fiscal rule to include:
- A credible debt correction mechanism.
- Exogenous escape clauses.
Subjects and keywords emphasized
- Debt sustainability
- Expenditure
- External debt
- Fiscal policy
- Fiscal rules
- Fiscal space
- International organization
- Monetary policy
- Public debt
- credibility in WAEMU, debt, Debt sustainability, deficit ceiling, deficit rule, deficit target, fiscal consolidation, fiscal rules, Fiscal space, Global, monetary union, stock flow adjustment, stock-flow adjustment
Source: Securing Fiscal Discipline and Credibility in WAEMU: WAEMU, By Ljubica Dordevic and Olivia Y Ibrahim, May 17, 2024.
Content in this bundle
- 1. Debt Dynamics