Assessing Dutch Fiscal and Debt Sustainability

December 4, 2020

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Format: Chicago

Benjamin Carton, and Armand P Fouejieu. Assessing Dutch Fiscal and Debt Sustainability, (USA: International Monetary Fund, 2020) accessed December 26, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Although the Netherlands entered the so-called Great Lockdown with a strong fiscal position, the Dutch fiscal balance is projected to deteriorate by an unprecedented magnitude, largely as a result of necessary fiscal measures deployed to weather the economic impact of the COVID-19 pandemic. This paper performs a stochastic analysis of risks to Dutch fiscal and debt sustainability over the next decade, taking into account alternative recovery scenarios and associated fiscal consolidation paths and also a range of macroeconomic shocks drawn from the historical experience of the Netherlands. The simulations show that even under significant downturn scenarios and assuming an initially less favorable fiscal position due to persistent economic effects of the pandemic, risks to the Dutch fiscal and debt sustainability would remain contained.

Subject: Fiscal policy, Fiscal risks, Fiscal stance, Government debt management, Public debt, Public financial management (PFM)

Keywords: Debt, Debt issuance, Debt level, Debt reduction objective, Debt target, Envisaged fiscal policy path, Fiscal deficit, Fiscal risks, Fiscal stance, Global, Government debt management, Increase warrant, SGP deficit, Stochastic simulations, Stochastic simulations., Sustainability, WP

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/269
Stock No:

WPIEA2020269
ISBN:

9781513557496
ISSN:

1018-5941

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