Restoring Public Finances 2012 –

draft report

Knut Klepsvik,

Senior Policy Analyst, OECD

CESEE SBO

Tallinn, 29 June 2012

The survey

• “OECD Fiscal Consolidation Survey 2012” – plans as per the end of 2011

• 30 participating countries

• Consolidation is defined as “concrete policies aimed at reducing deficits”

• Cumulative impact over the period 2009-15

• Reforms for labour and product markets aimed at improving economic growth are not included

Categories of countries

A. Countries with IMF/EU/ECB programmes

B. Countries under distinct market pressure

C. Countries with substantial deficits and debt, but less market pressure

D. Countries with none or marginal consolidation needs

Substantial improvements in fiscal balances

2010-11...

Source: OECD Economic Outlook No. 91

-6

-4

-2

0

2

4

6

8

10

HU

N

GR

C

PR

T

ISL

TUR

SVK

EST

NO

R

KOR

CZE

ESP

GB

R

FRA

PO

L

DEU IS

R

OEC

D

USA FIN

BEL

AU

T

ITA

SWE

IRL

NLD

DN

K

AU

S

CA

N

LUX

CH

E

SVN

JPN

NZL

Overall balance Structural balance

Percentage points of GDP

…and ambitious targets for 2014...

Overall fiscal balance

-14

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

14

2011 2014

% of GDP

… but still rising gross debt 2007-15

0

40

80

120

160

200

240

2015 2007 2011

% of GDP

Source: OECD Economic Outlook No. 91

Fiscal consolidation plans (2009-15) are

revised since last report…

-11-10-9-8-7-6-5-4-3-2-101234567

Percentage points of GDP

– the plans are extended and expanded

-2

0

2

4

6

8

10

12

14

16

18

20

Implemented consolidation in 2009-11 Consolidation plans in 2012-15

% of GDP

… and focus mostly on expenditures

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Expenditure reductions Revenue enhancements

Major programme measures

0

15

30

45

60

75%

Plan 2012 Plan 2011

Ou

t of3

0 r

esp

on

din

gco

un

trie

s

Major revenue enhancement areas

0

10

20

30

40

50

60

70

80

90%

Plan 2012 Plan 2011

Ou

t of 3

0 r

esp

on

din

gco

un

trie

s

Summary

• Most OECD countries have announced expanded and extended fiscal consolidation

• Half of announced consolidation is implemented

• A few countries are withdrawing from consolidation

• Countries in category A have consolidation plans 2012-15 of 3.7% to 8.2% of GDP

• Countries in category B have consolidation plans 2012-15 of 2.3% to 4.6% of GDP

THANK YOU

FOR YOUR ATTENTION