## THE IMF's ROLE — FISCAL RISK MANAGEMENT

## Source details

**Canonical URL:** [THE IMF's ROLE — FISCAL RISK MANAGEMENT](https://www.imf.org/en/topics/fiscal-policies/fiscal-risks/fiscal-risks-imf-role)

## Other formats

- [Markdown version](/en/topics/fiscal-policies/fiscal-risks/fiscal-risks-imf-role/index.md)
- [Structured JSON version](/en/topics/fiscal-policies/fiscal-risks/fiscal-risks-imf-role/index.json)
- [Bundle manifest](/en/topics/fiscal-policies/fiscal-risks/fiscal-risks-imf-role/bundle-manifest.json)

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### Importance of Fiscal Risk Management
- Fiscal risks can have a significant impact on government finances; recent experiences, including the COVID-19 pandemic and the global financial crisis, have led to large increases in government deficits and debt.
- Fiscal risks arise from a variety of sources:
  - macroeconomic and financial sector shocks
  - environmental risks
  - bailouts of state-owned enterprises and subnational governments
  - calls on government guarantees
  - obligations in public private partnerships
- A government's ability to respond to fiscal risks depends on:
  - quality of information about the sources and size of risks
  - capacity to assess the likelihood of risks materializing
  - strength of underlying public financial management institutions

### IMF tools, diagnostics, and guidance
- The IMF has developed practical tools, diagnostics, and guidance notes to help countries identify, quantify, disclose, and manage fiscal risks.
- The IMF's Fiscal Risk Assessments and Fiscal Transparency Evaluations:
  - help countries identify the scope and scale of fiscal risks
  - evaluate strengths and weaknesses in fiscal risk management practices
  - chart a course of actions to address fiscal risks
  - The Assessment draws on Pillar III of the Fiscal Transparency Code.
- The IMF's Fiscal Risk Toolkit provides practical tools to help countries assess and monitor fiscal risks.

### Capacity development and implementation
- The IMF’s Fiscal Affairs Department works closely with member countries to build capacity to identify, analyze, and manage fiscal risks.
- Capacity development supports:
  - application of the fiscal risk toolkit
  - strengthening institutional arrangements for monitoring and managing fiscal risks
  - enhancing fiscal transparency by disclosing fiscal risks, including through development of comprehensive fiscal risk statements
  - integration within broader public financial management and macro-fiscal capacity development offerings

### Fiscal risk management in numbers
- Over the past year the IMF's Fiscal Affairs Department and Regional Capacity Development Centers:
  - have been engaged in close to 100 fiscal risk capacity development activities
  - supported more than 50 member countries
  - delivered 8 regional workshops
- The IMF’s fiscal risk assessment tools:
  - have been applied in around 40 countries over the past two years
- Fiscal risk assessments have been undertaken as part of 35 Fiscal Transparency Evaluations completed since 2014

### Fiscal Transparency Evaluations (summary)
- IMF Fiscal Transparency Evaluations assess Fiscal Risk Analysis, Disclosure and Management Practices.
- Average scores by income group use the scale:
  - 3 = advanced practices
  - 2 = good practices
  - 1 = basic practices
- Country group abbreviations:
  - AE = Advanced Economies
  - EME = Emerging Markets and Middle-Income Economies
  - LIDC = Low-Income Developing Countries

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## Content in this bundle

- **Regional Capacity Development Centers**
  - [Regional Capacity Development Centers (Markdown version)](/-/media/files/capacity-developement/brochures/regional-capacity-development-centers-brochure-september-2019.pdf.md){rel="alternate" type="text/markdown"}
  - [Regional Capacity Development Centers (PDF)](/-/media/files/capacity-developement/brochures/regional-capacity-development-centers-brochure-september-2019.pdf){rel="external" type="application/pdf"}
- [Fiscal Transparency Code (PDF)](/external/np/fad/trans/code2019.pdf){rel="external" type="application/pdf"}

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## References

- [Fiscal Transparency Evaluations](https://www.imf.org/en/Topics/fiscal-policies/fiscal-transparency)
- [IMF's Fiscal Risk Toolkit](https://www.imf.org/en/Topics/fiscal-policies/Fiscal-Risks/Fiscal-Risks-Toolkit?sc_mode=1)
- [IMF’s broader public financial management and macro-fiscal capacity development](https://www.imf.org/en/Capacity-Development/what-we-do)
- [here.](https://www.imf.org/en/Topics/fiscal-policies/Fiscal-Risks/Fiscal-Risks-Knowledge-Hub/Fiscal-Risks-Knowledge-Hub-Publications?sc_mode=1)

_Source: https://www.imf.org/en/topics/fiscal-policies/fiscal-risks/fiscal-risks-imf-role_