2018年-IMF国际货币组织全球_Finland’s_Public_Sector_Balance_Sheet_A_Novel_Approach_to_Analysis_of_Public_Finance_44页_6mb

Summary of "Finland's Public Sector Balance Sheet: A Novel Approach to Analysis of Public Finance"

Core Content

This IMF Working Paper presents a novel approach to analyzing Finland's public finances by constructing a comprehensive public sector balance sheet from 2000 to 2016. It combines general government statistics with data on public corporations and pension liabilities to provide a more accurate picture of fiscal sustainability than traditional debt-focused analyses.

Main Points

• Comprehensive Balance Sheet Approach: The paper emphasizes that traditional fiscal sustainability analyses often focus on gross debt, but broader measures like government net worth are more informative. Net worth accounts for both assets and liabilities, including future fiscal flows, offering a more complete view of public finances.

• Static Balance Sheet: Finland's static public sector net worth was negative at around -160% of GDP in 2016. However, this is offset by strong future fiscal balances, which suggest the possibility of a more robust fiscal position if reforms are implemented as planned.

• Assets and Liabilities: Assets include non-financial assets (75% of GDP), financial assets (170% of GDP), and public corporations (10% of GDP). Liabilities include financial liabilities (75% of GDP), pension liabilities (301% of GDP), and other obligations. The balance sheet approach helps distinguish between structural and non-structural debt reduction measures.

• Pension Liabilities: Existing pension liabilities are a significant part of the balance sheet, representing the present value of future pension payments for public and private sector employees. These liabilities are particularly sensitive to interest rate changes and valuation effects.

• Intertemporal Balance Sheet: This balance sheet incorporates the present value of future fiscal flows, allowing for stress testing and policy analysis. It is more comprehensive but also more uncertain due to the assumptions required for future projections.

• Fiscal Stress Testing: The paper performs stress tests to assess the impact of various crises on public finances, highlighting that Finland's fiscal position remains sound if ongoing reform and consolidation efforts are maintained.

• Fiscal Buffer: The analyses suggest that Finland's public finances are resilient, and the current economic upswing offers an opportunity to rebuild fiscal buffers early.

Key Information

• Static Net Worth: Finland's static net worth was negative at -160% of GDP in 2016, but this was largely offset by strong future fiscal balances.

• Assets: Non-financial assets (75% of GDP) and financial assets (170% of GDP) are significant components of the balance sheet. Financial assets are heavily skewed towards equities, which are held primarily by pension funds.

• Public Corporations: These add 10% of GDP to net worth, with non-financial SOEs contributing the majority. They are subject to financial market fluctuations, but have generally maintained a positive net worth.

• Pension Liabilities: Existing pension liabilities are 301% of GDP, with 197.8% of GDP attributed to private sector employees. These are influenced by interest rates and asset valuations.

• Fiscal Surpluses and Valuation Gains: From 2000 to 2007, Finland's public sector net worth increased significantly due to fiscal surpluses and positive valuation changes in assets. These factors were more impactful than changes in debt levels.

• Crises Impact: During the GFC, Finland's net worth dropped by more than 20% of GDP due to valuation losses, while debt increased. However, the recovery in asset valuations helped offset the negative effects of fiscal deficits.

• Interest Rate Effects: Low interest rates increase the present value of pension liabilities, but also support higher equity and bond prices, which benefit pension funds' assets.

• Currency Risk: Finland's exposure to currency fluctuations is minimal, with most financial liabilities denominated in euros and hedged by the state treasury. Public corporations also hedge against foreign currency risks.

• Future Fiscal Path: The intertemporal balance sheet is based on the October 2017 WEO projections, extended with aging cost estimates and asset price projections. It assumes real GDP growth will stabilize at around 1.5%.

• Policy Implications: The paper recommends continuing reform and consolidation efforts to address aging pressures and to rebuild fiscal buffers during the current economic upswing.

Structure of the Balance Sheet

• General Government: Includes central government, social security funds, and local government. Financial assets are 127.9% of GDP, while liabilities are 75.0% of GDP.

• Public Corporations: Non-financial and financial SOEs contribute significantly to net worth. Financial assets are 36.9% of GDP, while liabilities are 33.7% of GDP.

• Central Bank: Holds financial assets of -23.3% of GDP and liabilities of -23.3% of GDP.

• Pension Liabilities: Represent a major liability, with 301% of GDP in 2016. These include both public and private sector obligations.

• Net Worth: Finland's net worth was -172.7% of GDP in 2016, but excluding pension liabilities, it was 128.4% of GDP.

Conclusion

The paper concludes that Finland's public finances are sound, and that the current economic conditions offer an opportunity to rebuild fiscal buffers. Continued reform and consolidation efforts are essential to address aging pressures and ensure long-term fiscal sustainability. The balance sheet approach provides a more comprehensive and nuanced understanding of public finances, making it a valuable tool for policy analysis and stress testing.