South Asia Economic Focus, Fall 2018 : Budget Crunch

South Asia remains the fastest-growing region in the world and its performance has strengthened further. The external environment, while remaining conducive, has become more turbulent. Monetary policy is being adjusted accordingly, but fiscal policy is not equally responsive and fiscal deficits rema...

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Main Author:	World Bank
Format:	Serial
Language:	English
Published:	World Bank, Washington, DC 2018
Subjects:	ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RISKS EXTERNAL VULNERABILITY FISCAL POLICY INFLATION AND PRICES INVESTMENT MACROECONOMIC DEVELOPMENT AND OUTLOOK TRADE FISCAL TRENDS FISCAL SUSTAINABILITY SHARED PROSPERITY
Online Access:	http://hdl.handle.net/10986/30454

id	okr-10986-30454
recordtype	oai_dc
spelling	okr-10986-304542021-04-23T14:04:58Z South Asia Economic Focus, Fall 2018 : Budget Crunch World Bank ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RISKS EXTERNAL VULNERABILITY FISCAL POLICY INFLATION AND PRICES INVESTMENT MACROECONOMIC DEVELOPMENT AND OUTLOOK TRADE FISCAL TRENDS FISCAL SUSTAINABILITY SHARED PROSPERITY South Asia remains the fastest-growing region in the world and its performance has strengthened further. The external environment, while remaining conducive, has become more turbulent. Monetary policy is being adjusted accordingly, but fiscal policy is not equally responsive and fiscal deficits remain large. Despite strong demand from advanced economies and considerable depreciation of domestic currencies, imports are still growing stronger than exports in most countries. Rising oil prices add further pressure on South Asia’s high current account deficits. South Asia is expected to remain the fastest-growing region in the world and its performance could strengthen even further. Widening current account deficits and increased turbulence in international markets call for prudent economic policy, and fiscal discipline is at the core of prudent management. However, most South Asian countries generate low tax revenue. They also run large fiscal deficits, often amplified by economic shocks and political cycles, which limits their room to maneuver. Tax revenue increases with economic growth, but so does government expenditure. Since spending multipliers are positive, the procyclicality of spending amplifies boom-and-bust cycles instead of smoothening them. In several countries debt levels are high and hidden liabilities are a concern. Not all these patterns are present in all countries, but they combine into a specific set of challenges in each, putting fiscal matters at the core of development policy. 2018-09-27T18:54:16Z 2018-09-27T18:54:16Z 2018-10-06 Serial 978-1-4648-1369-6 http://hdl.handle.net/10986/30454 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Publication South Asia South Asia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RISKS EXTERNAL VULNERABILITY FISCAL POLICY INFLATION AND PRICES INVESTMENT MACROECONOMIC DEVELOPMENT AND OUTLOOK TRADE FISCAL TRENDS FISCAL SUSTAINABILITY SHARED PROSPERITY
spellingShingle	ECONOMIC GROWTH ECONOMIC POLICY ECONOMIC RISKS EXTERNAL VULNERABILITY FISCAL POLICY INFLATION AND PRICES INVESTMENT MACROECONOMIC DEVELOPMENT AND OUTLOOK TRADE FISCAL TRENDS FISCAL SUSTAINABILITY SHARED PROSPERITY World Bank South Asia Economic Focus, Fall 2018 : Budget Crunch
geographic_facet	South Asia South Asia
description	South Asia remains the fastest-growing region in the world and its performance has strengthened further. The external environment, while remaining conducive, has become more turbulent. Monetary policy is being adjusted accordingly, but fiscal policy is not equally responsive and fiscal deficits remain large. Despite strong demand from advanced economies and considerable depreciation of domestic currencies, imports are still growing stronger than exports in most countries. Rising oil prices add further pressure on South Asia’s high current account deficits. South Asia is expected to remain the fastest-growing region in the world and its performance could strengthen even further. Widening current account deficits and increased turbulence in international markets call for prudent economic policy, and fiscal discipline is at the core of prudent management. However, most South Asian countries generate low tax revenue. They also run large fiscal deficits, often amplified by economic shocks and political cycles, which limits their room to maneuver. Tax revenue increases with economic growth, but so does government expenditure. Since spending multipliers are positive, the procyclicality of spending amplifies boom-and-bust cycles instead of smoothening them. In several countries debt levels are high and hidden liabilities are a concern. Not all these patterns are present in all countries, but they combine into a specific set of challenges in each, putting fiscal matters at the core of development policy.
format	Serial
author	World Bank
author_facet	World Bank
author_sort	World Bank
title	South Asia Economic Focus, Fall 2018 : Budget Crunch
title_short	South Asia Economic Focus, Fall 2018 : Budget Crunch
title_full	South Asia Economic Focus, Fall 2018 : Budget Crunch
title_fullStr	South Asia Economic Focus, Fall 2018 : Budget Crunch
title_full_unstemmed	South Asia Economic Focus, Fall 2018 : Budget Crunch
title_sort	south asia economic focus, fall 2018 : budget crunch
publisher	World Bank, Washington, DC
publishDate	2018
url	http://hdl.handle.net/10986/30454
_version_	1764472163481419776

South Asia Economic Focus, Fall 2018 : Budget Crunch

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