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Uruguay: Recent Economic Developments International Monetary Fund

Uruguay: Recent Economic Developments

International Monetary Fund

Published March 16th 2001
ISBN : 9786613867063
ebook
111 pages
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 About the Book 

1. While there is consensus that countries should aim at implementing neutral to countercyclical fiscal policy, it is common to see budgets that amplify economic cycles. Such procyclical policies can be seen during downturns-when governments, in particular in emerging market countries, often cut spending or raise taxes to deal with financing constraints-as well as during upswings-when the sense of bonanza can make it hard for policymakers to resist pressures to spend temporary revenues. The absence of precise information regarding the fiscal stance stripped from cyclical and one-off effects contributes to the risk of procyclicality and can even jeopardize long-term sustainability.