Annex: Using GFS for Fiscal Analysis.
Th is annex describes the use of GFS in creating fi scal
indicators.
Introduction.
4.51 Th is annex off ers an overview of the appli-
cation of the GFS framework in creating commonly
used fi scal indicators.^1 Some of these indicators can
be observed or derived directly from the GFS frame-
work, while others can be derived using a combina-
tion of GFS with other macroeconomic data.
4.52 Fiscal indicators may be produced for the gen-
eral government and public sectors (see Chapter 2).
Fiscal indicators for the subsectors of general govern-
ment and the public sector can also be produced to
take account of the decentralized nature of fi scal re-
sponsibilities in an economy. Using data from the GFS
framework enhances the comparability of data across
countries (see paragraph 1.13), which is important in
establishing robust analytical fi ndings.
Fiscal Indicators Available from the GFS Framework.
4.53 Th e GFS framework produces fi scal indica-
tors from the transactions, other economic fl ows,
stock positions, aggregates, or balancing items. For
example, in the Statement of Operations, net lending/
net borrowing is the basic indicator of the fi scal bal-
ance, measured from “above-the-line” as revenue
minus expenditure (with expenditure comprising ex-
pense plus the net investment in nonfi nancial assets).
Th is fi scal balance can alternatively be measured from
“below-the-line” as the diff erence between transac-
tions in fi nancial assets and liabilities, also referred
to as fi nancing transactions. From an above-the-line
(^1) Th e International Financial Statistics and the Government
Finance Statistics Yearbook contain a large and comprehensive
database of macroeconomic statistics, including GFS. See also
the IMF’s Fiscal Transparency Code at http://www.imf.org/external/
np/fad/trans/. First published in 1998 and updated in 2007 and
2014, the IMF’s Code of Good Practices on Fiscal Transparency and
accompanying Manual and Guide are centerpieces of the global
architecture of fi scal transparency norms and standards.
perspective, GFS provide detailed information on
revenue sources, and the composition of expenditure,
while the “below-the-line” approach provides detailed
information on how governments invest surpluses or
fi nance defi cits.
4.54 Th e Balance Sheet off ers data on regularly
used fi scal stock position indicators, such as the gross
and net debt, and the stock position and composition
of various categories of assets and liabilities (see para-
graphs 7.14–7.19). Additional aggregates, such as the
stock position of cash and the maturity breakdown of
other fi nancial instruments, are useful for an analysis
of liquidity. Balancing items such as net worth and net
fi nancial worth allows for an analysis of the wealth of
government.
4.55 An analysis of gross debt sustainability re-
quires calculating a primary balance, which can be
calculated by excluding interest expense from the cal-
culation of net lending/net borrowing or cash surplus/
defi cit. When net debt is considered in the analysis,
the primary balance should be calculated excluding
the impact of interest expense and interest revenue.
Similarly, the fi scal burden—an indicator of the com-
pulsory contributions to the government—can be
derived from transactions related to taxes and social
contributions.
4.56 Table 4A.1 presents a list of some fi scal indica-
tors that are directly available from GFS or that can be
derived from GFS.
Fiscal Indicators Requiring Additional Data
4.57 Some fi scal indicators require additional
information. Th e overall fi scal balance, for example,
refl ects the net lending/net borrowing aft er transac-
tions in assets and liabilities are adjusted for trans-
actions that are deemed to be for public policy
purposes (also called “policy lending”). Notably, all
proceeds under privatization (including proceeds
from the sale of fi xed assets) are included as fi nan-
cial items, while policy lending is treated as if it is an
expense rather than a transaction in fi nancial assets.