Amid the unprecedented challenges unleashed by the COVID-19 pandemic worldwide, Latin America and the Caribbean (LAC) faced a pressing need: have intelligent tools to anticipate and manage risks threatening the economic and fiscal stability of the region. In response to this need, FISLAC (Fiscal Sustainability for Latin American and Caribbean Countries) was born, an … [Read more...] about First Year of FISLAC: Transforming Fiscal Sustainability in Latin America and the Caribbean
New Index Helps Governments Design Better Escape Clauses to Bridge Fiscal Rigidity with Crisis Adaptability
In recent years, the global economic landscape has been marked by unprecedented upheavals, including the Global Financial Crisis, the disruptions caused by the COVID-19 pandemic, and, more recently, geopolitical tensions. These crises have tested the resilience of fiscal frameworks, highlighting the pressing need for greater adaptability to navigate unforeseen challenges … [Read more...] about New Index Helps Governments Design Better Escape Clauses to Bridge Fiscal Rigidity with Crisis Adaptability
How to Prevent Debt from Hurting Economic Growth
Three years after the onset of the COVID-19 pandemic, countries in Latin America and the Caribbean (LAC) are still dealing with its economic consequences. Currently, one of the main points of concern is the excessive level of public indebtedness and the risk it represents to economic stability and economic growth. This year the IDB published its flagship study … [Read more...] about How to Prevent Debt from Hurting Economic Growth
Complying with Fiscal Rules in Latin America and the Caribbean: From Promises to Action
Fiscal rules have become a common policy tool to promote the sustainability of public finances, as the number of countries with at least one fiscal rule has grown from ten in 1991 to more than 100 by 2021. Although fiscal rules promise to support fiscal discipline and maintain debt sustainability, their track record is often mixed, as simply adopting a fiscal rule does not … [Read more...] about Complying with Fiscal Rules in Latin America and the Caribbean: From Promises to Action
How Do Inflation Shocks Affect Public Debt Dynamics?
The COVID-19 pandemic had a very large impact on government finances. As governments saw their revenues reduced and their expenditures increased to cope with the health and social emergencies, the public debt rapidly mounted. By the end of 2020, the debt-to-GDP ratios had increased by 10 percentage points (pp) compared to pre pandemic levels in the average emerging … [Read more...] about How Do Inflation Shocks Affect Public Debt Dynamics?