Calibrating Fiscal Rules: A Consideration of Natural Disaster Risks
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Disclaimer: This Technical Guidance Note should not be reported as representing the views of the IMF. The views expressed in this Note are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Summary:
This technical note assesses how large shocks from natural disasters are key source of vulnerabilities for public finances. It extends the IMF Fiscal Affairs Department calibration toolkit by developing a methodology to calibrate fiscal rules in the event of natural disaster shocks and the possibility of implementing climate adaptation and mitigation measures. The features incorporated in this technical note would allow the calibration of a prudent medium-term fiscal anchor as well as annual budgetary limits that ensure the sustainability of public finances. The note is accompanied by a set of toolkits that provides instructions on calibrating a medium-term debt anchor and corresponding operational rules in the presence of natural disaster risks, accounting for climate investment and other mitigation mechanisms.
Series:
Technical Notes and Manuals No. 2023/002
Subject:
Climate finance Environment Expenditure Fiscal consolidation Fiscal policy Fiscal rules Fiscal stance Natural disasters Revenue administration
Frequency:
occasional
English
Publication Date:
July 31, 2023
ISBN/ISSN:
9798400237508/2075-8669
Stock No:
TNMEA2023002
Format:
Paper
Pages:
22
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