A Rule-Based Medium-Term Fiscal Policy Framework for Tanzania

A zero net domestic financing (NDF) target has served Tanzania well in recent years, contributing to prudent expenditure policy, improved fiscal sustainability, and macroeconomic stability. Moving to a more flexible fiscal policy, however, may serve Tanzania better. The "diamond rule" proposed in this paper incorporates a permanent hard ceiling on debt and annual benchmark limits on NDF, expenditure growth, and nonconcessional external financing. This rule would provide flexibility for countercyclical policy and help define the fiscal space for infrastructure spending that is consistent with longrun fiscal sustainability. An illustrative simulation shows that Tanzania has considerable fiscal space for development spending.

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Year of publication:	2009-11-01
Authors:	Kim, Daehaeng ; Saito, Mika
Institutions:	International Monetary Fund (IMF)
Subject:	Fiscal sustainability \| Budgetary policy \| Debt sustainability \| External borrowing \| External debt \| Government expenditures \| Public investment \| Revenues \| public debt \| fiscal policy \| budget balance \| fiscal rules \| fiscal space \| expenditure policy \| fiscal rule \| debt service \| fiscal risks \| fiscal discipline \| public finances \| domestic financing \| annual budget \| public finance \| budget balances \| expenditure growth \| debt relief \| budget process \| foreign borrowing \| domestic debt \| fiscal policy framework \| tax revenues \| fiscal stance \| debt management \| domestic borrowing \| fiscal responsibility \| fiscal position \| fiscal management \| revenue collection \| fiscal outcomes \| medium-term fiscal framework \| external public debt \| debt service payments \| debt dynamics \| excessive borrowing \| government deficit \| fiscal council \| budgetary process \| fiscal targets \| fiscal risk \| fiscal framework \| fiscal policies \| fiscal deficit \| debt sustainability analysis \| structural budget balance \| public sector debt \| medium-term fiscal frameworks \| annual budgets \| budget preparation process \| fiscal balance \| fiscal convergence criteria \| fiscal aggregates \| central bank \| budget activities \| multilateral debt relief \| fiscal policy objectives \| general budget \| fiscal years \| foreign loans \| commercial borrowing \| national debt \| fiscal vulnerability \| fiscal activities \| current account \| fiscal policy rules \| fiscal decentralization \| fiscal balances \| fiscal responsibilities \| tax base \| concessional debt \| national budget \| fiscal policy rule \| fiscal frameworks \| fiscal consolidation \| sovereign bonds \| fiscal aggregate \| fiscal vulnerabilities \| fiscal regime \| fiscal resources \| fiscal issues \| fiscal outturns \| government budget \| highly indebted countries \| public expenditure \| fiscal costs \| public spending \| multilateral debt \| fiscal adjustments \| fiscal responsibility law \| debt relief initiative \| low debt \| budget allocation \| budget deficit \| amount of debt \| fiscal convergence \| fiscal projections \| budget deficits \| total external debt \| fiscal institutions \| public external debt \| debt accumulation \| debt situation \| national government budget \| current account deficit \| fiscal analysis \| bilateral debt \| tax policy \| fiscal responsibility laws \| public expenditures \| external financing \| debt stock \| budgetary discipline \| primary expenditure \| government expenditure \| deficit financing \| fiscal adjustment \| primary deficit \| fiscal performance \| budget support \| debt burden \| indebted countries \| fiscal pressures \| debt servicing capacity \| fiscal policy outcomes \| medium-term fiscal sustainability \| debt servicing \| balance of payments

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Extent:	application/pdf
Series:	IMF Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series IMF Working Papers Number 09/244 2 pages long
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008540930