Serial

New Approaches to Closing the Fiscal Gap

Show simple item record

collection.link.135
https://openknowledge.worldbank.org/handle/10986/6000
collection.link.137
https://openknowledge.worldbank.org/handle/10986/6002
collection.link.215
https://openknowledge.worldbank.org/handle/10986/11883
collection.name.135
Portuguese PDFs Available
collection.name.137
Spanish PDFs Available
collection.name.215
LAC Semiannual Report
dc.contributor.author
World Bank
dc.date.accessioned
2022-09-30T15:54:05Z
dc.date.available
2022-09-30T15:54:05Z
dc.date.issued
2022-10-04
dc.date.lastModified
2022-10-14T18:04:07Z
dc.description.abstract
As the COVID‐19 crisis recedes, Latin America and the Caribbean (LAC) is back to work and looking forward. Reported deaths related to the pandemic are low and have plausibly converged to global levels. Yet low vaccination rates in some countries leave them vulnerable to new variants. In most countries, gross domestic product (GDP) and employment have fully recovered their 2019 levels, although forecasted growth rates might be said to be “resiliently mediocre”: banking systems appear sound, and rising debt burdens are manageable so far, but growth is not expected to exceed the low levels of the 2010 decade. Poverty in terms of income (monetary poverty) has largely receded with the economic recovery, but the longer‐term scars of the pandemic in terms of education and health have planted deep seeds of future inequality. Redressing these problems and undertaking the structural reforms needed to reach higher levels of growth and reduce poverty remain central on the policy agenda. The new and unwelcome entrant in the policy space is inflation. While comparable to advanced country levels and well managed by regional monetary authorities, inflation nonetheless is being propelled by forces that may give it more staying power than originally hoped. Finally, public deficits induced by the pandemic and the need to finance critical government programs and directions have opened a fiscal gap and led to constrained fiscal space. The need to close the fiscal gap, put debt on a sustainable footing, and generate fiscal space to finance necessary physical and social investments has led to a search for new revenues and in particular to pressure to increase income taxes. In looking at any tax hike, concerns center on the possible depressive effects on growth, overall progressivity, and possible incentives for informality. This report presents new evidence on these effects for value added taxes (VAT) and income taxes. It also advocates for steps to cut wasteful government spending and increase government efficiency - both to generate substantial resources and as an entry point to a broader agenda of state modernization and generating public trust.
en
dc.identifier.isbn
978-1-4648-1929-2
dc.identifier.uri
http://hdl.handle.net/10986/38093
dc.language.iso
en_US
dc.publisher
Washington, DC : World Bank
dc.relation.ispartofseries
LAC Semiannual Update; October 2022
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo
dc.subject
ECONOMIC GROWTH
dc.subject
COVID-19
dc.subject
LATIN AMERICA AND THE CARIBBEAN
dc.subject
INFLATION
dc.subject
FISCAL ADJUSTEMENT
dc.subject
UNCERTAINTY
dc.subject
PERSONAL INCOME TAX
dc.subject
FISCAL REVENUE
dc.subject
PUBLIC SPENDING EFFICIENCY
dc.title
New Approaches to Closing the Fiscal Gap
en
dc.type
Serial
okr.date.disclosure
2022-10-04
okr.doctype
Publications & Research
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/978-1-4648-1929-2
okr.language.supported
en
okr.region.geographical
Latin America and the Caribbean
okr.topic
Finance and Financial Sector Development :: Access to Finance
okr.unit
LCRCE Chief Economist Office for Latin America and Caribbean Region

Show simple item record



This item appears in the following Collection(s)