Securing Fiscal Discipline and Credibility in WAEMU: WAEMU

May 17, 2024

Preview Citation

Format: Chicago

Ljubica Dordevic, and Olivia Y Ibrahim. Securing Fiscal Discipline and Credibility in WAEMU: WAEMU, (USA: International Monetary Fund, 2024) accessed December 3, 2024

Summary

Fiscal consolidation and the reintroduction of the WAEMU fiscal framework is crucial for maintaining debt sustainability, external viability, and financial stability. The 3 and 70 percent of GDP deficit and debt ceilings envisaged by the expired rule remain appropriate, while addressing the stock-flow adjustments will help rebuild fiscal buffers. Convergence to a fiscal deficit of 3 percent of GDP should be ensured by 2025— barring exceptional circumstances—with focus on domestic revenue mobilization, while controlling expenditure. To secure fiscal discipline and credibility, it is essential to revamp the fiscal rule with a credible debt correction mechanism and exogenous escape clauses.

Subject: Debt sustainability, Expenditure, External debt, Fiscal policy, Fiscal rules, Fiscal space, International organization, Monetary policy, Public debt

Keywords: Credibility in WAEMU, Debt, Debt sustainability, Deficit ceiling, Deficit rule, Deficit target, Fiscal consolidation, Fiscal policy, Fiscal rules, Fiscal space, Global, Monetary union, Stock flow adjustment, Stock-flow adjustment

Publication Details

Pages:

16
Volume:

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DOI:

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Issue:

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Series:

Selected Issues Paper No. 2024/012
Stock No:

SIPEA2024012
ISBN:

9798400275395
ISSN:

2958-7875

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