Cyclicality of Revenue and Structural Balances in South Africa

Burcu Aydin

No 2010/216, IMF Working Papers from International Monetary Fund

Abstract: This paper applies a disaggregated method for the calculation of the cyclical component of the budget balance for South Africa with an emphasis on the effect of commodity and asset prices, and credit cycle. Results show that the cyclicality of tax revenue is mostly explained by the variations in tax bases. Change in the credit to private sector also has some affect on the revenue performance; however, asset and commodity prices are not significant in explaining the deviation of revenue from its trend. Nonetheless, quantitative effects of these prices are subject to assumptions used for long-run price levels.

Keywords: WP; tax revenue; South Africa; structural balance; credit growth; commodity and asset prices; revenue performance; price deflator; cyclical revenue fluctuation; tax revenue regression; revenue cycle; revenue data; aggregate revenue; Fiscal stance; Asset prices; Output gap; Commodity prices; Africa (search for similar items in EconPapers)
Pages: 24
Date: 2010-09-01
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Citations: View citations in EconPapers (5)

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