- Marialuz Moreno Badia
- Published Date:
- October 2016
World Economic and Financial Surveys
Use It Wisely
©2016 International Monetary Fund
Cover: IMF Multimedia Services Division
Composition: AGS, An RR Donnelley Company
Joint Bank-Fund Library
Names: International Monetary Fund.
Title: Fiscal monitor.
Other titles: World economic and financial surveys, 0258-7440
Description: Washington, DC : International Monetary Fund, 2009- | Semiannual | Some issues also have thematic titles.
Subjects: LCSH: Finance, Public—Periodicals. | Finance, Public—Forecasting—Periodicals. | Fiscal policy—Periodicals. | Fiscal policy—Forecasting—Periodicals.
Classification: LCC HJ101.F57
ISBN: 978-1-51356-060-1 (paper)
Disclaimer: The Fiscal Monitor (FM) is a survey by the IMF staff published twice a year, in the spring and fall. The report analyzes the latest public finance developments, updates medium-term fiscal projections, and assesses policies to put public finances on a sustainable footing. The report was prepared by IMF staff and has benefited from comments and suggestions from Executive Directors following their discussion of the report on September 23, 2016. The views expressed in this publication are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Directors or their national authorities.
Recommended citation: International Monetary Fund (IMF). 2016. Fiscal Monitor: Debt—Use It Wisely. Washington, October.
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- Assumptions and Conventions
- Executive Summary
- Chapter 1. Debt: Use It Wisely
- How High Is Debt?
- Why Does the Level of Debt Matter?
- Fiscal Policy and Private Sector Deleveraging
- Deleveraging in Practice: What Does History Teach Us?
- Box 1.1. China: What Do We Know about the General Government’s Balance Sheet?
- Box 1.2. The Role of Fiscal Policy during Financial Recessions
- Box 1.3. Brazil: Private Debt and the Strength of the Public Sector Balance Sheet
- Box 1.4. Benefits of Targeted Fiscal Intervention during Times of Private Deleveraging
- Box 1.5. How Much Do Financial Markets Value Government Balance Sheets?
- Annex 1.1. Debt Data Set
- Annex 1.2. Private and Public Debt and the Pace of the Recovery
- Annex 1.3. Interlinkages between Public and Private Debt: Selected Summary of the Literature
- Annex 1.4. Private Deleveraging and the Role of Fiscal Policy
- Annex 1.5. Policies during Deleveraging Episodes
- Country Abbreviations
- Methodological and Statistical Appendix
- Data and Conventions
- Fiscal Policy Assumptions
- Definition and Coverage of Fiscal Data
- List of Tables
- Fiscal Monitor, Selected Topics
- IMF Executive Board Discussion Summary
- Figure 1.1. Global Gross Debt
- Figure 1.2. Gross Debt by Country Groups
- Figure 1.3. Sectoral Changes in Debt
- Figure 1.4. Advanced Economies: Debt Developments
- Figure 1.5. Emerging Market Economies: Debt Developments
- Figure 1.6. Low-Income Countries: Debt Developments
- Figure 1.7. Debt Decomposition
- Figure 1.8. Selected Advanced Economies: Current Deleveraging Episodes
- Figure 1.9. Total Private Debt during Deleveraging Episodes
- Figure 1.10. Selected Advanced Economies: Leverage
- Figure 1.11. Public Debt in Normal and Financial Recessions
- Figure 1.12. Europe: Estimated Capital Impact of Immediate Nonperforming Loan Disposal—Density Functions
- Figure 1.13. Contribution to Deleveraging
- Figure 1.14. Macroeconomic Policies and Deleveraging
- Figure 1.1.1. China and Other Emerging Market Economies: Estimates of Net Financial Worth at the End of 2015
- Figure 1.2.1. Fiscal Policy and the Nature of the Recovery after Financial Crises
- Figure 1.3.1. Change in Debt, 2005–15: Brazil versus Other Emerging Market Economies
- Figure 1.3.2. Brazil: Change in Stock of Bank Credit
- Figure 1.4.1. Impact of Targeted Interventions in a Deleveraging Phase
- Figure 1.5.1. Difference between Market-Implied and Accounting-Valued Net Worth, 2014
- Figure 1.5.2. Median Evolution of Market-Implied Net Worth, 2012–15
- Figure 1.5.3. Change in Market-Implied Expected Losses on Sovereign Debt, 2012–15
- Annex Figure 1.1.1. Nonfinancial Private Sector Debt: Country Coverage
- Table 1.1. Private Sector Deleveraging Episodes: Basic Facts
- Table 1.2. Selected Fiscal Policy Interventions during Deleveraging Episodes
- Table 1.3. Costs of Selected Fiscal Policy Interventions
- Table 1.3.1. Brazil: Public Sector Balance Sheet, 2014
- Annex Table 1.2.1. Advanced Economies: Local Projection Results from Equation (A1.2.1)
- Annex Table 1.2.2. Emerging Market Economies: Local Projection Results from Equation (A1.2.1)
- Annex Table 1.5.1. Private Sector Deleveraging Case Studies: Macroeconomic Conditions
- Annex Table 1.5.2. Costs of Selected U.S. Fiscal Interventions
- Table A. Economy Groupings
- Table B. Advanced Economies: Definition and Coverage of Fiscal Monitor Data
- Table C. Emerging Market and Middle-Income Economies: Definition and Coverage of Fiscal Monitor Data
- Table D. Low-Income Developing Countries: Definition and Coverage of Fiscal Monitor Data
- Table A1. Advanced Economies: General Government Overall Balance, 2007–21
- Table A2. Advanced Economies: General Government Primary Balance, 2007–21
- Table A3. Advanced Economies: General Government Cyclically Adjusted Balance, 2007–21
- Table A4. Advanced Economies: General Government Cyclically Adjusted Primary Balance, 2007–21
- Table A5. Advanced Economies: General Government Revenue, 2007–21
- Table A6. Advanced Economies: General Government Expenditure, 2007–21
- Table A7. Advanced Economies: General Government Gross Debt, 2007–21
- Table A8. Advanced Economies: General Government Net Debt, 2007–21
- Table A9. Emerging Market and Middle-Income Economies: General Government Overall Balance, 2007–21
- Table A10. Emerging Market and Middle-Income Economies: General Government Primary Balance, 2007–21
- Table A11. Emerging Market and Middle-Income Economies: General Government Cyclically Adjusted Balance, 2007–21
- Table A12. Emerging Market and Middle-Income Economies: General Government Cyclically Adjusted Primary Balance, 2007–21
- Table A13. Emerging Market and Middle-Income Economies: General Government Revenue, 2007–21
- Table A14. Emerging Market and Middle-Income Economies: General Government Expenditure, 2007–21
- Table A15. Emerging Market and Middle-Income Economies: General Government Gross Debt, 2007–21
- Table A16. Emerging Market and Middle-Income Economies: General Government Net Debt, 2007–21
- Table A17. Low-Income Developing Countries: General Government Overall Balance, 2007–21
- Table A18. Low-Income Developing Countries: General Government Primary Balance, 2007–21
- Table A19. Low-Income Developing Countries: General Government Revenue, 2007–21
- Table A20. Low-Income Developing Countries: General Government Expenditure, 2007–21
- Table A21. Low-Income Developing Countries: General Government Gross Debt, 2007–21
- Table A22. Low-Income Developing Countries: General Government Net Debt, 2007–21
- Table A23. Advanced Economies: Structural Fiscal Indicators
- Table A24. Emerging Market and Middle-Income Economies: Structural Fiscal Indicators
- Table A25. Low-Income Developing Countries: Structural Fiscal Indicators
Assumptions and Conventions
The following symbols have been used throughout this publication:
. . . to indicate that data are not available
— to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist
– between years or months (for example, 2008–09 or January–June) to indicate the years or months covered, including the beginning and ending years or months
/ between years (for example, 2008/09) to indicate a fiscal or financial year
“Billion” means a thousand million; “trillion” means a thousand billion.
“Basis points” refers to hundredths of 1 percentage point (for example, 25 basis points are equivalent to ¼ of 1 percentage point).
“n.a.” means “not applicable.”
Minor discrepancies between sums of constituent figures and totals are due to rounding.
As used in this publication, the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.
Further Information and Data
The data and analysis appearing in the Fiscal Monitor are compiled by the IMF staff at the time of publication. Every effort is made to ensure their timeliness, accuracy, and completeness, but it cannot be guaranteed. When errors are discovered, there is a concerted effort to correct them as appropriate and feasible. Corrections and revisions made after publication are incorporated into the electronic editions available from the IMF eLibrary (www.elibrary.imf.org) and on the IMF website (www.imf.org). All substantive changes are listed in detail in the online tables of contents.
For details on the terms and conditions for usage of the contents of this publication, please refer to the IMF Copyright and Usage website, www.imf.org/external/terms.htm.
The projections included in this issue of the Fiscal Monitor are based on the same database used for the October 2016 World Economic Outlook and Global Financial Stability Report (and are referred to as “IMF staff projections”). Fiscal projections refer to the general government unless otherwise indicated. Short-term projections are based on officially announced budgets, adjusted for differences between the national authorities and the IMF staff regarding macroeconomic assumptions. The medium-term fiscal projections incorporate policy measures that are judged by the IMF staff as likely to be implemented. For countries supported by an IMF arrangement, the medium-term projections are those under the arrangement. In cases in which the IMF staff has insufficient information to assess the authorities’ budget intentions and prospects for policy implementation, an unchanged cyclically adjusted primary balance is assumed, unless indicated otherwise. Details on the composition of the groups, as well as country-specific assumptions, can be found in the Methodological and Statistical Appendix.
The Fiscal Monitor is prepared by the IMF Fiscal Affairs Department under the general guidance of Vitor Gaspar, Director of the Department. The project was directed by Abdelhak Senhadji, Deputy Director, and Benedict Clements, Division Chief. The main authors of this issue are Marialuz Moreno Badia (team leader), Nicoletta Batini, Victor Duarte Lledo, Lorenzo Forni, Samba Mbaye, Giovanni Melina, and Rossen Rozenov. In addition, contributions were received from Marco Bernardini, Paolo Dudine, Nicolas End, Luc Eyraud, Xiangming Fang, Fabien Gonguet, Mariusz Jarmuzek, Andreas (Andy) Jobst, Constant Lonkeng Ngouana, Paolo Medas, Amanda Sayegh, and Sungwook Yoon. Agus Firmansyah, Emmanuel Hife, Marco Martinez, Christian Saborowski, and Sangeeta Srivastava advised on data issues. Excellent research assistance was provided by Kyungla Chae, Young Kim, Juna Luzi, and Tafadzwa Mahlanganise. Erin Yiu provided excellent coordination and editorial support. Michael Harrup from the Communications Department led the editorial team and managed the report’s production, with assistance from Susan Graham, Lucy Scott Morales, Nancy Morrison, and EEI Communications.
Input, comments, and suggestions were received from other IMF departments, including area departments—namely, the African Department, Asia and Pacific Department, European Department, Middle East and Central Asia Department, and Western Hemisphere Department—as well as from the Institute for Capacity Development, Monetary and Capital Markets Department, Research Department, Statistics Department, and Strategy, Policy, and Review Department. Both projections and policy considerations are those of the IMF staff and should not be attributed to Executive Directors or to their national authorities.