International Monetary Fund

Fiscal Affairs

Structural Fiscal Balances

Last Updated: July 28, 2017

Adjustment of fiscal balances for the output cycle is crucial for assessing fiscal sustainability. Other temporary factors may also affect fiscal balances, concealing the underlying fiscal position. Correcting for a broad set of transitory factors such as commodity shocks; housing, stock, and other asset price cycles; output composition and absorption effects; and one-off factors could provide a more accurate view of the underlying fiscal position.

No single method for adjusting fiscal balances exists, as the appropriate adjustment needs to take several country-specific factors into account, including data availability, the fiscal regime, and the economic structure of the country. With this website we aim at providing information about various approaches for estimating structural fiscal balances, including an excel-based tool and a technical guidance note, important papers from a growing literature on the topic and examples of studies that applied these methods. Issues covered range from choosing the right approach suitable for a specific country, to estimating revenue and expenditure elasticities and measuring the output gap and deviations from the normal asset or commodity price level.

The objective is to update this site periodically. We would very much appreciate your feedback, which will allow us to continue refining our methods. We would be happy to respond to any questions on the material provided here.

Technical Note and Template

Background Literature