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Medium-term projections in the planning of general government finances

Audit Id 1575273498454
Title Medium-term projections in the planning of general government finances
Title in original language

Keskipitkän aikavälin kehitysarviot julkisen talouden suunnittelussa

Finnish

Year 2019
Subject

Government Operations (Budget and Spending)

Type

Performance

Type of performance

Performed by single SAI

Comments The audit was targeted at medium-term projections of general government finances prepared at the Ministry of Finance. Here, ‘medium-term’ refers to the period covering the current year and the next four years. Medium-term projections are used in the planning of general government finances and fiscal policy and in the setting of related targets. The purpose of the audit was to assess the knowledge base behind fiscal policy decision-making and its reliability, openness and transparency. It was also examined how the methods applied in medium-term projections of the real economy impact the projections of general government finances and their reliability. Based on the audit conducted, the fact that output gap estimates often need to be significantly revised afterwards weakens the reliability of the medium-term projections of general government finances. The methods applied to the drafting of the cyclical condition estimates used as a basis of medium-term projections should be improved and broadened. There are substantial differences in the projection methods applied to medium-term projections compared with those applied to short-term forecasts. Going forward, methodology descriptions should also specify the features of medium-term projections in a comprehensive manner. Projection reporting should also be clarified to ensure access to information that is sufficient to safeguard the budgetary powers of Parliament.
Country

Finland

Materials

Audit report

Finnish

Download report

Summary

Swedish

See summary

Summary

English

See summary
Contact
Ville Haltia
ville.haltia@vtv.fi
https://www.vtv.fi/en
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