How to Prepare Expenditure Baselines

By Claude P Wendling, Eliko Pedastsaar, Fazeer Sheik Rahim

June 1, 2022

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Claude P Wendling, Eliko Pedastsaar, and Fazeer Sheik Rahim. How to Prepare Expenditure Baselines, (USA: International Monetary Fund, 2022) accessed November 21, 2024

Summary

Expenditure baseline projections (hereafter, “base¬lines”) are a key analytical concept in budget preparation that refers to estimates of future expenditure on the assumption that current policies remain unchanged. They serve as reference points against which other data, such as proposed or approved budgets, or expenditure ceilings, can be compared. In many countries they are a basic tool for starting the preparation of the budget. They represent neither future spending allocations nor total expected outturn as they do not incorporate estimates of the cost of new policies and the expected impact of saving measures. Other features of baselines are that they are generally produced over a multiyear period, they can be calcu¬lated at any level or form of the budget classification (that is, ministries, economic classification, specific policies, functions or programs), and can be summed up to higher levels (such as the whole budget). Hence, they can be useful at both a micro and an aggregate level. This note aims to clarify and establish a framework that covers baselines’ various purposes and uses. It first discusses the definition and objectives of baselines and the methodology used for producing them before outlining how they should be prepared. It concludes with a discussion of the key success factors for making the most effective use of baselines.

Subject: Budget planning and preparation, Economic sectors, Expenditure, Financial crises, Fiscal policy, Fiscal space, Labor, Public financial management (PFM), Wage adjustments, Wages

Keywords: Africa, Baseline expenditure, Baseline projection, Budget frameworks, Budget negotiations, Budget planning and preparation, Economic policies, Expenditure baseline, Expenditure baselines, Fiscal space, Line ministries and agencies, Ministry of finance, Pension spending, Publication order, Publication service, Social welfare, Spending needs, Wage adjustments, Wages

Publication Details

Pages:

21
Volume:

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DOI:

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Issue:

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Series:

How-To Note No 2022/002
Stock No:

HTNEA2022002
ISBN:

9798400210129
ISSN:

2522-7912

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