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July 2021

July 19, 2021

The Cost of Future Policy: Intertemporal Public Sector Balance Sheets in the G7

Cost Balance Sheet
Posted by Yugo Koshima, Jason Harris, Alexander F. Tieman, and Alessandro De Sanctis[1]

A recent IMF Working Paper on “the Cost of Future Policy: Intertemporal Public Sector Balance Sheet in the G7" delves into a new approach to assessing fiscal sustainability. Going beyond the standard view of deficits and debt, the working paper uses the Intertemporal Net Financial Worth (INFW) of the public sector as a key measure of fiscal sustainability (see the IMF’s October 2018 Fiscal Monitor for more details). INFW is computed as the net financial worth of the public sector (static) balance sheet, comprising all assets and liabilities controlled by the government (including state-owned enterprises), plus the net present value of future primary balances. The former represents consequences of past fiscal policy, while the latter shows the cost of future policy.

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July 12, 2021

Infrastructure Investment and Climate Resilience in the Pacific

FAD-PFTAC PIMA Workshop.jpeg
Posted by Gemma Preston, Paul Seeds, and Iulai Lavea [1]

Increased investment infrastructure investment is critical to driving sustainable development and economic growth in the Pacific. Over the next ten years, annual infrastructure investment needs in the Pacific region are estimated to be US$3.1 billion per year. However, this is against a backdrop of constrained fiscal space and increasing government debt as governments grapple with the response to the COVID-19 pandemic. Other challenges include geographic remoteness and dispersed populations that increase the cost of infrastructure in a region with significant vulnerability to natural disasters and climate change.

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