, and revenue mobilization. The report also emphasized the importance of maintaining the current rules in place since 2015 in a context of economic uncertainty, while assessing and testing in parallel possible revisions for a couple of years.
5. This report relates the SBR to the medium-term objectives of fiscal policy and discusses a number of implementation issues . Chapter II computes a range of medium-term public debt objectives based on precautionary and development needs considerations. Chapter III reviews the SBRformula considered by the authorities and
This Technical Assistance Report discusses measures to establish a structural balance rule and a public debt objective in Paraguay. The analysis suggests that the authorities’ structural balance formula should be more conservative and—to mitigate the risk of unwarranted expenditure growth—should assume that future structural revenues will grow at the same pace as trend GDP. Under this assumption, the structural balance rule is broadly equivalent to an expenditure rule, constraining spending to grow at trend GDP—a formula that is simpler to implement and easier to communicate to the public. Moreover, the formula should account for new revenue measures more explicitly, provided there are safeguards to ensure that they are estimated fairly.