Fiscal policy uses government spending and taxation to influence macroeconomic variables like employment, inflation and economic growth. It has both discretionary and automatic components. The objectives of fiscal policy include achieving desirable price levels, consumption levels, employment levels, income distribution, and capital formation. Fiscal policy instruments include public expenditure, taxes, and public debt. The government can use these tools to stimulate or contract the economy during inflationary or deflationary periods.

11. CONSOLIDATED BUDGET 35 21.8 10.4 8.5 1.9 1.8 22.8 9.7 13.1 39 22.7 10.7 8.4 2.3 2 26.3 10 16.3 42.2 23.5 11 8.3 2.7 3 28.2 9.5 18.7 45.5 22.5 11.4 8.5 2.9 2.7 31.4 8.4 23 Expenditures Non-Interest Expenditures Current Expenditures Personnel Other Investment Transfer Non-Interest Transfer Interest Payments 2004 2003 2002 2001 CONSOLIDATED BUDGET BALANCE / GDP (%)

12. CONSOLIDATED BUDGET 27.9 27.5 23.1 3.9 0.5 0.4 27.9 27.4 23.4 2.8 1.1 0.5 27.2 26.9 21.5 3.9 1.5 0.4 28.8 28.4 22.3 4.2 2 0.3 Revenues General Budget Tax Revenues Non-Tax Revenues Special Revenue and Funds Annexed Budget 2004 2003 2002 2001 CONSOLIDATED BUDGET BALANCE / GDP (%)

15. CONSOLIDATED BUDGET 6.1 5.1 -7.0 5.1 4.9 -11.2 3.7 2.5 -15 6.3 4.4 -16.7 Primary Surplus IMF-Defined Primary Surplus Budget Deficit 2004 2003 2001 2001 CONSOLIDATED BUDGET BALANCE / GDP (%)

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