2016年-IMF国际货币组织全球_Iceland_Selected_Issues_23页_723kb

Summary of the Selected Issues Paper on Iceland

Core Content

This document provides an analysis of Iceland's public expenditure challenges and the effectiveness of monetary policy in small open economies. It outlines the country's fiscal response to the financial crisis, its current expenditure pressures, and the potential for future policy adjustments.

Main Views and Key Information

A. Context

• Financial Crisis Impact: Iceland's financial crisis severely disrupted its public finances, leading to a sharp decline in both revenue and expenditure.
• Fiscal Consolidation: The general government deficit was reduced from over 12 percent of GDP in 2008 to 0.5 percent in 2015. The gross debt ratio dropped by almost 30 percentage points from 95 percent of GDP in 2011.
• Policy Measures: A mix of revenue and expenditure measures were implemented, including temporary tax measures like a wealth tax and a bank liability levy, and permanent increases in corporate and value-added tax rates.
• Economic Recovery: The improving economic situation has enabled tax reforms and a reduction in social benefit spending.
• Interest Savings: The public debt ratio is on a downward trajectory, and the country is expected to achieve a net debt ratio of 30 percent of GDP or less, generating interest savings of around 2 percent of GDP.

B. Five Expenditure Pressure Points

1. Healthcare Expenditure

• Challenges: Post-crisis fiscal adjustment led to cuts in healthcare spending, which has since partially recovered. Concerns include growing waiting lists, centralization of care, and recruitment difficulties.
• Performance: Despite these challenges, Iceland has one of the best public healthcare systems globally, with high life expectancy and low infant mortality. Public health expenditure is around 7.3 percent of GDP, slightly below the OECD average.
• Cost Containment: The health sector has maintained cost control since 1998, with public expenditure on healthcare around 7-8 percent of GDP. The sector includes two university hospitals, serving a dispersed population.

2. Education Expenditure

• Fiscal Impact: Education spending fell by about 0.5 percent of GDP between 2009 and 2013, but has since recovered. The education system is shared between central and municipal governments.
• Performance: Iceland has low achievement gaps across schools and high enrollment in early childhood programs. However, PISA scores in 2012 show weaker performance compared to the OECD and peer group averages.
• Challenges: Educational attainment has weakened slightly, and the drop-out rate from upper secondary education is high, with 30 percent of adults lacking upper secondary education. Teacher salaries fell in real terms, and the teaching profession is aging.

3. Public Investment

• Decline: Public investment fell sharply after the crisis, from an average of 4.7 percent of GDP in the two decades prior to the crisis to 2.9 percent in 2015.
• Capital Stock: The capital stock reached a tipping point in 2012, where depreciation exceeded gross investment.
• Future Needs: There is a growing list of public investment projects, particularly in healthcare. A new hospital is planned, which could cost up to 5 percent of GDP.

4. Disability Expenditure

• Trend: Disability benefits have been increasing for decades, now accounting for a significant portion of GDP and total revenues.
• Causes: Mental health-related disability and musculoskeletal issues contribute to the rising costs. Changes in the labor market have also affected the reintegration of disabled workers.
• Policy Implications: Reintegrating disabled workers into the labor market could help reduce disability outlays and free up resources for other public spending.

5. Public Pensions

• System Overview: Iceland's pension system is well-funded and provides high pension payments at a relatively low cost. It consists of three pillars: a publicly funded first pillar, a private second pillar, and a voluntary third pillar.
• Funding Shortfall: Three public sector pension funds for pre-reform system participants have a funding shortfall of about 24 percent of GDP.
• Future Projections: Without reforms, the government will need to inject around 1 percent of GDP annually into these funds starting in 2030 until 2060. A modest annual contribution is expected to be sufficient to address this shortfall by 2030.

C. Conclusions

• Fiscal Evolution: Iceland has moved beyond crisis-related fiscal priorities, with the budget now in balance and a downward trajectory for public debt.
• Expenditure Priorities: The country has an opportunity to re-examine public expenditure priorities, particularly in health, education, and investment. Social protection and disability spending remain elevated.
• Policy Framework: The new Organic Budget Law requires a Statement of Fiscal Policies, which will guide the identification of expenditure priorities for sustainable growth.
• Monetary Policy Effectiveness: In small open economies, monetary policy effectiveness is challenged by volatile capital flows. Macroprudential policies can help mitigate these risks and improve the ability of monetary policy to focus on domestic objectives.

Capital Flows and Monetary Policy Effectiveness in Small Open Economies

A. Context

• Trilemma: Policymakers in small open economies face a trilemma between exchange rate stability, capital mobility, and monetary policy independence.
• Monetary Policy Focus: Monetary policy in inflation targeting countries is primarily focused on inflation, but domestic interest rates can influence capital flows, creating a reinforcing loop between monetary policy and capital flows.
• Financial Stability Risks: Capital flows can lead to risks such as short-term wholesale funding, foreign currency exposure, and credit booms, which were evident in Iceland before the crisis.

B. Purpose of the Study

• Objective: To assess the effectiveness of monetary policy in small open economies and whether macroprudential policies can enhance this effectiveness.
• Empirical Findings: Capital flows affect monetary policy transmission through long-term bond yields and liquidity conditions. Macroprudential measures, such as liquidity coverage ratios and foreign currency position caps, can reduce financial stability risks and provide more room for monetary policy.
• Uncertainty: The effectiveness of many macroprudential policies remains uncertain, and their implementation is still in early stages.

Conclusion

• Monetary Policy Challenges: In small open economies, monetary policy effectiveness is undermined by large and volatile capital flows.
• Macroprudential Role: These policies can help reduce risks and improve the ability of monetary policy to focus on domestic objectives.
• Iceland's Experience: The country's experience highlights the importance of balancing fiscal and monetary policy to ensure long-term sustainability and growth.