Investor Presentaiton
2
Foundations of the New Fiscal Framework
Establishment of
the Fiscal Advisory
Council.
Creation of the
Expert Committee.
Debt sensitivity
analysis.
Validation of
Structural Balance
calculations.
Potential GDP.
On September 29, 2021, the Fiscal Advisory Council (FAC) was established. The FAC is a
technical, honorary and independent body composed of three members. It is tasked with
assessing the overall implementation of the fiscal rule.
The Expert Committee (EC) was created on December 29, 2021. The EC has eleven
members representing Universities, consulting firms and think tanks. Will provide technical
parameters to the Ministry of Economy and Finance used for the calculations and
projections of the structural fiscal balance.
On June 2022, a debt sensitivity analysis was conducted to quantify the uncertainty associated with
the baseline debt projections. Key variables that drive debt dynamics are exposed to random
shocks. These shocks are based on the historical behavior of each variable. A range of debt-to-GDP
trajectories are obtained, which allows for an evaluation of the risk distribution around specific
projection in the baseline scenario.
On July 7, 2022, the FAC concluded that the calculation of the structural fiscal balance
presented in the 2021 Budget Review was in accordance with the official methodology.
On February 22, 2023, the FAC published the report with the review of the calculation of
the Structural Fiscal Result 2022. The Central Government's structural fiscal deficit stood at
2.5% of GDP in 2022, 0.7 percentage points lower than the headline balance.
On June 2023, the EC evaluated data such as capital stock, amount of employment, and total
factor productivity. With these variables in play, the estimated GDP growth projection was
2.8% for the next 10 years, higher than the 2.1% observed in February 2022.
Implementation of the new fiscal institutional framework marks the first time that the Ministry of
Economy and Finance has clear, well-defined metrics and indicative targets to assess its fiscal
policy and promote accountability. Furthermore, estimates for unobservable values (structural
fiscal balance) have the methodological validation of the independent Fiscal Advisory Council.
Source: Ministry of Economy and Finance.
(*) FSS-Social Security Trust Fund.
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