2013年-世界发展银行全球_Fiscal_Sustainability_in_Burundi___Baseline_Projections_Stochastic_Simulations_and_Policy_Scenarios_38页_702kb

Fiscal Sustainability in Burundi: Baseline Projections, Stochastic Simulations, and Policy Scenarios

Core Content Overview

This policy research paper examines the medium-term fiscal sustainability of Burundi, focusing on the country's exposure to both external and internal shocks. It highlights the challenges the government faces in maintaining fiscal discipline and reducing debt, despite recent economic growth and structural reforms.

Main Points and Key Findings

1. Current Fiscal Situation

• Burundi has experienced an average annual real GDP growth of 3.5% since 2001, but this growth has not been sufficient to significantly reduce poverty due to its high population growth rate (around 3% per year).
• The country has seen improvements in public services, such as free education and health care, but these have been financed through high fiscal deficits.
• The fiscal deficit (including grants) has remained around 3–4% of GDP, despite some economic recovery.

2. Fiscal Strategy and Sustainability

• The government's current fiscal strategy is not sustainable even with a gradually improving external environment and relatively strong growth.
• Tax revenue is expected to grow at 5.2% annually in real terms, but non-tax revenue (mainly from state asset sales) is limited to about 1% of GDP.
• Grants are projected to decline as a share of GDP over the medium term, as the country moves away from post-conflict status.
• The government is expected to limit civil service and military wage growth, but this alone is insufficient to reduce deficits.

3. Debt and Financing Trends

• Government debt is expected to remain high, reaching around 34% of GDP by 2017.
• External borrowing is expected to finance most of the deficit, with domestic borrowing playing a smaller role.
• The country is already at high risk of debt distress, and further domestic borrowing could increase inflationary pressure and crowd out private sector financing.

4. Risks to Fiscal Sustainability

• External Shocks:
  • Coffee Price Volatility: Coffee is Burundi's main export and source of foreign exchange, but its prices have been highly volatile. A 1 percentage point drop in coffee prices could increase the debt-to-GDP ratio by 5–7 percentage points.
  • Rainfall Shocks: Agriculture dominates the economy, and rainfall volatility significantly affects growth. Stochastic simulations show that severe weather shocks could raise the debt-to-GDP ratio to 39% by 2017, but the impact is less severe than coffee price shocks.
  • Aid Volatility: Foreign aid accounts for 18% of GDP and 55% of government revenue in 2012. While aid has been a key source of financing, its volatility and unpredictability pose a major risk. However, estimates are less reliable due to the mixed nature of aid shocks (both exogenous and endogenous).

5. Policy Implications

• Fiscal sustainability will depend on the government's ability to:
  • Broaden the tax base.
  • Streamline tax incentives and exemptions.
  • Control civil service and military wages.
  • Reduce short-run expenditure pressures.
• These risks need to be closely monitored over the political cycle, especially as the country approaches the 2015 elections, which may complicate the implementation of tight fiscal policies.
• The paper advocates for strategic fiscal reforms to build resilience against shocks and improve long-term fiscal sustainability.

Methodology and Approach

• The paper uses a standard intertemporal sustainability framework, which defines fiscal sustainability as the condition where the present value of government disbursements does not exceed the present value of revenues.
• It also employs stochastic simulations and scenario analysis to quantify the impact of various shocks on fiscal outcomes.
• Monte Carlo simulations are used to model the probability distribution of possible fiscal outcomes under different shock scenarios.
• Fan charts are used to visualize the distribution of potential debt-to-GDP ratios, showing the likelihood of different outcomes.

Key Tables and Data

• Table 1: Shows the macroeconomic assumptions used for the baseline projections, including GDP growth, inflation, exchange rates, and commodity prices.
• Table 2: Outlines the baseline fiscal projections, showing revenue, expenditure, and deficit figures for the period 2012–2017.
• Table 3: Presents the sensitivity of debt to changes in GDP growth and exchange rate depreciation.

Conclusion

• Burundi's fiscal sustainability is at risk due to a combination of external and internal vulnerabilities.
• The government must implement structural reforms, including improving tax collection and managing public expenditure, to ensure long-term fiscal health.
• The paper contributes to the literature by applying stochastic simulations to assess the impact of climate and commodity price shocks on fiscal sustainability, and by highlighting the importance of policy continuity and donor confidence in the country's development trajectory.