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Dimension 14.1. Timing, coverage and data requirements

Time period  Coverage Data requirements/calculation Data sources
Last three completed fiscal years. Whole economy.
  • Forecasts of key macroeconomic indicators to include at least GDP growth, inflation, interest rates, and the exchange rate.
  • Clear explanation of assumptions used to prepare forecasts.
  • Evidence that the forecasts cover the budget year and the two following fiscal years, and are updated at least annually.
  • Evidence of review of forecasts and assumptions by an entity other than preparing entity.
  • Information about the authority of the reviewing entity, for example, legal, regulatory or procedural documents.
  • Annual budget documents.
  • Annual budget circular.
  • Policy and analytical advice to government.
  • MoF working papers.
  • The reviewing entity.
  • The unit preparing the initial forecasts

determine, but it is important to seek information on how the process is conducted and what happens if there are differences of view between the participating bodies.

14.1:4. For this dimension it does not make a difference if the responsibility is legally assigned to MoF because the government is ultimately responsible for acceptance of the forecasts. It is, however, important for assigning responsibility and accountability for forecast preparation and administrative efficiency for there to be clear and explicit responsibility for the task.

Dimension 14.2. Fiscal forecasts

DIMENSION MEASUREMENT GUIDANCE

14.2:1. This dimension assesses whether the government has prepared a fiscal forecast for the budget year and the two following fiscal years based on updated macroeconomic projections and that reflects government-approved expenditure

and revenue policy settings. The updated revenue projections should be presented by revenue type and should clearly identify underlying assumptions (including rates, coverage, and projected growth).

14.2:2. The updated expenditure estimates should be based on the post–budget year estimates of the preceding approved budget, adjusted to take into account the budget and medium-term fiscal impact of any post-budget expenditure policy decisions (including approved adjustments for inflation and public service wages). Variations between the final approved fiscal forecast and the projections included in the previous year’s approved budget should be explained and published as part of the annual budget process.

14.2:3. Table 14.2 provides an example of how such variations can be presented. This dimension complements PI-5 by examining in more detail the information that the government produces on fiscal forecasts.

 

Pillar Four: Policy Based Fiscal Strategy and Budgeting
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