Level of Fiscal Reserves |
1999-00 (billion) |
2000-01 (billion) |
2001-02 (billion) |
2002-03 (billion) |
2003-04 (billion) |
|---|---|---|---|---|---|
Upper Guideline |
508 |
543 |
576 |
606 |
653 |
Estimated Reserve Balance |
444 |
438 |
440 |
443 |
453 |
Lower Guideline |
305 |
326 |
346 |
364 |
392 |
Upper Guideline: (M1 Money Supply+12 Months' Government Expenditure) X (1+25%)
Estimated Reserve Balance: (Figures based on Medium Range Forecast published in March 2000, adjusted to take account of 1999-2000 outturns.)
Lower Guideline: (M1 Money Supply+12 Months' Government Expenditure) X (1-25%)
Illustration : The level of fiscal reserves falls within the guidelines, albeit towards the lower end of the range. While this scenario appears acceptable, the fiscal balance hinges on achieving a sufficient level of recurrent revenue. Reserves should not be used indiscriminately to meet recurrent expenditure requirements.
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