Modernizing the framework for fiscal policy and public debt sustainability analysis (DSA) has become necessary, particularly in light of the recent crisis and rising sustainability concerns in some advanced economies. While recognizing the inherently challenging nature of such analysis, this paper highlights areas where improvements are needed and makes both general and specific proposals on how this could be achieved. It also proposes to move to a risk-based approach to DSAs for all market-access countries, where the depth and extent of analysis would be commensurate with concerns regarding sustainability, while a reasonable level of standardization would be maintained.

The framework for fiscal policy and public debt sustainability analysis (DSA) in market-access countries (MACs) was reviewed by the Executive Board in August 2011.1 The review responded to shortcomings in identifying fiscal vulnerabilities and assessing risks to debt sustainability against the backdrop of increased concerns over fiscal policy and public debt sustainability in many advanced economies.

The article reviews Mauritius’ developments and its macroeconomic policies for the imminent years. Growth has been flexible in these years but the postglobal crisis period did not show any remarkable developments. The country was heavily dependent on European exports and vulnerable to external shocks. To undergo debt and external sustainability in 2014–15, the authorities are reframing fiscal and monetary policies, restructuring physical infrastructure policies, and pension and labor reforms. The control of excess of liquidity and improvement in national savings will pave the way to reduce inflation pressures and external imbalances.

This paper provides an overview of sovereign debt portfolio risks and discusses various liability management operations (LMOs) and instruments used by public debt managers to mitigate these risks. Debt management strategies analyzed in the context of helping reach debt portfolio targets and attain desired portfolio structures. Also, the paper outlines how LMOs could be integrated into a debt management strategy and serve as policy tools to reduce potential debt portfolio vulnerabilities. Further, the paper presents operational issues faced by debt managers, including the need to develop a risk management framework, interactions of debt management with fiscal policy, monetary policy, and financial stability, as well as efficient government bond markets.

Reflecting slow progress on reforms, weakened governance, and elevated policy uncertainty, growth remains subdued. With the economy unable to create enough jobs, the quest for inclusive growth has been elusive, making South Africa one of the most unequal societies. Growing government spending has led to a doubling of public debt in the last decade. Credible monetary policy has kept inflation expectations anchored, albeit at near the top of the target band. The current account deficit remains financed by potentially volatile portfolio inflows. The new administration’s immediate priority has focused on improving governance and restoring confidence.

Portugal’s economic adjustment has continued, but the contraction in output has been milder than expected. The 2012 outlook for Europe has deteriorated substantially, with growth revised down by 11⁄4 percentage points relative to spring forecasts. Substantially higher capital requirements across Europe, coupled with cuts in exposure to the periphery, are placing further pressure on banks and the flow of credit. The authorities have made significant progress in revenue administration reform and public administration restructuring.

This paper discusses Morocco’s 2013 Article IV Consultation on economic developments and policies. The IMF report highlights that despite unfavorable external and domestic environment Morocco’s economic performance has improved during 2013. The Morocco’s economy remains vulnerable to international conditions and a difficult regional environment. It focuses on the importance of giving more flexibility in the exchange rate regime that intends to support competitiveness, enhance the capacity of the economy to absorb shocks, and support the authorities’ strategy for diversifying external flows away from Europe.

Government financial assets are increasingly recognized as playing an important role in assessing fiscal sustainability. However, very little research has been done on the dynamics of government financial assets compared to liabilities. In this paper, we investigate the impact of recent financial crises and macroeconomic shocks on government balance sheets, decomposing the separate effects on financial assets and liabilities. Using quarterly Government Finance Statistics (GFS) data, we analyze a panel of 27 countries over the period 1999Q1-2017Q1 through fixed effects and panel VAR techniques. Financial crises are shown to deteriorate the net financial worth of governments, but no significant impact is found on assets suggesting that they are not being used as fiscal buffers in bad times. On the contrary, countries that suffered both financial and banking crises experienced an “artificial” increase of their asset position through bank bailouts. Macroeconomic shock analyses reveal that government balance sheet items are countercyclical, but important asymmetries are found in their dynamics.

Budget 2013 (HC 1033) announces further detail on the Government's deficit reduction plans, new steps to ensure monetary policy continues to support the economy with a new remit for the Monetary Policy Committee (MPC), and further measures to ease the long-term pressure on the public finances. Central Government departmental expenditure limits will be reduced by 1.1 billion in 2013-14 and by 1.2 billion in 2014-15, with the funds used to support housing. Schools and health budgets will remain unchanged; and public sector pay awards will be limited to an average of 1%. Budget 2013 is fiscally neutral - action to promote growth includes: (i) a reduction in corporation tax by 1% in April 2015; (ii) a 2000 employment allowance per year from April 2014 designed particularly to help charities and small businesses with employer's National Insurance contributions, (iii) a capital spending increase of 3 bi

The Thirty-Sixth Issue of Selected Decisions and Selected Documents of the International Monetary Fund includes decisions, interpretations, and resolutions of the Executive Board and the Board of Governors of the IMF, as well as selected documents relevant to the current activities of the Fund.