Medium-Term Budgeting

Many budget decisions have impacts well beyond the current budget year. To make rational and efficient budgetary decisions, decision-makers must be aware of the medium- and long-term implications. It is increasingly becoming standard practice for countries to introduce a medium-term budget framework to extend the time horizon of their budget management processes. While specific mechanisms and terminology vary, the most successful approaches to development of medium-term budgeting incorporate the following: A medium-term fiscal framework (MTFF) which sets out aggregate fiscal targets, ceilings and projections; A medium-term budget framework (MTBF) to include budgetary ceilings and forward estimates for individual ministries and agencies; A medium-term expenditure framework (MTEF) which sets out resources requirements for maintenance of existing services and assesses the budgetary impact of new policies or policy changes.[...]