Paraguay: Technical Assistance Report-Establishing a Structural Balance Rule and a Public Debt Objective

March 15, 2017

Preview Citation

Format: Chicago

Paraguay: Technical Assistance Report-Establishing a Structural Balance Rule and a Public Debt Objective, (USA: International Monetary Fund, 2017) accessed November 12, 2024

Summary

This Technical Assistance Report discusses measures to establish a structural balance rule and a public debt objective in Paraguay. The analysis suggests that the authorities’ structural balance formula should be more conservative and—to mitigate the risk of unwarranted expenditure growth—should assume that future structural revenues will grow at the same pace as trend GDP. Under this assumption, the structural balance rule is broadly equivalent to an expenditure rule, constraining spending to grow at trend GDP—a formula that is simpler to implement and easier to communicate to the public. Moreover, the formula should account for new revenue measures more explicitly, provided there are safeguards to ensure that they are estimated fairly.

Subject: Asset and liability management, Debt limits, Expenditure, Fiscal policy, Fiscal stance, Public debt, Public investment and public-private partnerships (PPP)

Keywords: CR, Debt anchor, Debt limit, Debt limits, Europe, Expenditure rule, Fiscal stance, Global, ISCR, Public investment and public-private partnerships (PPP), SBR formula, Structural revenue, Trend GDP, West Africa, Western Europe

Publication Details

Pages:

67
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2017/067
Stock No:

1PRYEA2017001
ISBN:

9781475586268
ISSN:

1934-7685

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