IMF Survey Magazine eNews

January 2010 Fiscal Affairs Department of the International Monetary Fund

Latest Fiscal Monitor

Last year, the Fiscal Affairs Department (FAD) of the IMF initiated a new series of regular updates on global fiscal developments and prospects. The new series, called the ”Fiscal Monitor”, examines developments in a variety of country groups, with emphasis on G-20 countries. The latest issue of the Monitor was published in early November. It contains updated estimates of medium-term fiscal adjustment requirements in advanced countries; takes a fresh look at previous large adjustment episodes; and presents new research on debt, deficits, and interest rates.


Current Fiscal Policy Issues

In a Staff Position Note FAD Director Carlo Cottarelli and Monetary and Capital Markets Director Jose Viñals analyzed“A Strategy for Renormalizing Fiscal and Monetary Policies in Advanced Economies”. The authors explore the magnitude of the fiscal and monetary interventions in the past eighteen months and present elements of a strategy to bring back fiscal and monetary policy to normalcy in the aftermath of the crisis.

FAD is working with the Monetary and Capital Markets Department and the Research Department of the IMF on a study requested by the G-20 on a “range of options” for “how the financial sector could make a fair and substantial contribution towards paying for any burdens associated with the government interventions” to counteract financial sector crises. This interdepartmental work is headed by John Lipsky, First Managing Director of the IMF, who in an interview explains how the IMF will go about its work as it studies various approaches.

FAD In The News

Le Monde published an interview with FAD director Carlo Cottarelli on an article that had appeared in the IMF Survey regarding the growing public debt of advanced nations.

In an interview with the Financial Times, Carlo Cottarelli discussed the challenging fiscal outlook requiring difficult but not unprecedented adjustment in many advanced countries.


On April 22-23 FAD will host the first Fiscal Forum at the IMF Washington, D.C. headquarters. The Fiscal Forum is a network of senior government officials from over 30 major economies in the world which provides an opportunity to senior officials from participating countries to learn from each other’s experience in tackling the key macro-fiscal policy challenges of the day and to discuss policy coordination. The focus of the first Fiscal Forum, participation in which is by invitation, will be fiscal strategy after the crisis.

In a recent study that was discussed by the IMF Executive Board, entitled “Fiscal Rules—Anchoring Expectations for Sustainable Public Finances,” FAD staff shows that fiscal rules can help countries strengthen public finances and ensure debt sustainability. The study is based on a unique database encompassing virtually all fiscal rules existing in IMF member countries at both national and supra-national level. It also provides a detailed discussion of the design and implementation of fiscal rules around the world.

In the October 26, 2009 issue of IMF Survey online Sanjeev Gupta, Deputy Director of the IMF’s Fiscal Affairs Department and Catherine Pattillo, Advisor in the Strategy, Policy and Review Department gave an interview about the role the IMF plays in issues related to health and social policy in developing countries.

In a Staff Position Note on “Climate Policy and the Recovery” FAD staff Benjamin Jones and Michael Keen consider the challenge posed by two fiscal policy imperatives: how to exit from the recent crisis while developing an effective response to climate change.

On January 19, 2010 FAD and the IMF Offices in Europe organized a high-level conference on Exiting from High Public Debt. The event provided a forum for discussion of a range of issues related to the risks arising from high public indebtedness, including the implications for interest rates and growth, for public debt management, and for financial markets more generally. The conference also covered debt reduction strategies, with specific reference to lessons that can be drawn from historical experiences.

Tax Administration and Tax Policy

A joint workshop in Accra, Ghana on Tax Administration and Resource TaxationIn November, FAD ‘s Revenue Administration and Tax Policy divisions conducted a joint workshop in Accra, Ghana on Tax Administration and Resource Taxation. Participants from ten countries, primarily from Anglo- and Francophone West Africa, attended the workshop, which was the first of its kind in the region. The workshop dealt with both policy and administrative issues pertaining to natural resources, which were thoroughly debated and reflected the countries’ experiences in managing this critical source of government revenue. The workshop was funded by the Norwegian government through its Oil for Development Fund.

Two New Fiscal Websites

FAD is pleased to announce the recent launching of two sites on First, a website titled Fiscal Issues at the IMF, which highlights topical fiscal policy issues, as well as provides links to research, publications, and commentary on fiscal matters. Second, a Fiscal Transparency Website, which presents information about various aspects of this issue in a user-friendly way.

Technical Notes and Manuals

Technical Notes coverAs part of a new series launched by the IMF, FAD has issued six Technical Notes and Manuals.  These public zations aim at raising awareness of contemporary fiscal topics among practitioners, officials and academics and at improving the dissemination of FAD's technical assistance advice. Five of the notes focus on public financial management issues: accrual accounting, performance-based budgeting, cash management, commitment control, and budget classification. Another note provides practical guidance on how to compute cyclically-adjusted fiscal balances and automatic stabilizers. Forthcoming notes will address revenue administration and other fiscal issues.

New Working Papers by FAD Staff

FAD staff have prepared two working papers in recent months on a diverse number of topics:  “Top-Down Budgeting - An Instrument to Strengthen Budget Management”, by Gösta Ljungman; “and “How Good Are Ex Ante Program Evaluation Techniques? The Case of School Enrollment in PROGRESA” by Fabian Bornhorst.

Fiscal Discussion on the IMFdirect Blog

iMFdirect logoThe Fiscal Affairs Department led a blog discussion in November addressing current fiscal policy topics. The first blog focused on the challenge for countries affected by the crisis of balancing the need for fiscal support with preserving fiscal solvency. The second blog discussed the goal of a fiscal exit strategy after the crisis. The third blog made the case for action on climate change and the fiscal implications. The fourth blog commented on the health care challenge, observing that the associated fiscal challenge is not contained only to the U.S. Finally, the last blog addressed the fiscal impact of the global crisis on low-income countries.