Mid-Year Review

The Mid-Year Review provides a detailed explanation of the state of the budget six months into the budget year.

In order to ensure that programs are being implemented effectively and to identify any emerging problems, the government should conduct a comprehensive mid-year review of the budget’s implementation about six months into the budget year. This review should assess the state of the economy relative to the initial macroeconomic forecast and update the economic projections for the remainder of the year. The MYR should also provide updated estimates of expenditure, revenue, and debt, reflecting the impact of actual experience to date and revised projections for the full fiscal year. Revised estimates in the MYR should reflect both economic and technical changes as well as new policy proposals, including the reallocation of funds between administrative units, with a comprehensive explanation of any estimate adjustments. Issues such as cost increases due to inflation or any unexpected events should be identified and appropriate counter measures should be proposed. The public release of a Mid-Year Review is intended to promote accountability and sound management.

It is important to distinguish a Mid-Year Review from the In-Year Report that is issued six months into the budget year. An In-Year Report issued at six months cannot substitute for a Mid-Year Review. An In-Year Report typically records actual expenditure and revenue to date but does not include a discussion of how these trends will affect the estimates of full-year expenditure or some of the other detailed budget execution analysis that is typically found in a Mid-Year Review.

Assessing the public availability of the MYR
Publicly available budget documents are defined as those documents that are published on the website of the public authority issuing the document within the time frame specified in the OBS methodology and that all citizens are able to obtain free of charge. (See the Open Budget Survey Guidelines on Public Availability of Budget Documents.) This is a change from previous rounds of the Open Budget Survey: now at minimum documents must be made available on the Internet and free of charge to be considered publicly available.

The OBS methodology requires that for an MYR to be considered publicly available, it must be made available to the public no later than three months after the reporting period ends (i.e., three months after the midpoint of the fiscal year). If the MYR is not released to the public at least three months after the reporting period ends, option “d” applies. Option “d” should also be chosen for documents that are produced for internal purposes only (that is, produced but never released to the public) or are not produced at all. Some governments may publish budget documents further in advance than the latest possible dates outlined above. In these instances, researchers should choose options “a” or “b,” depending on the date of publication identified for the MYR. See Question MYR-2 for more information.

Questions on the MYR in the OBS

 * Questions on the MYR in the OBS

What counts?
Some countries publish mid-year reviews that only provide limited analysis of the budget at the mid-way point. However, a key criteria for considering a document as a MYR is whether it provides forward-looking estimates, for the remainder of that fiscal year, for at least one of the following: the macroeconomic forecast (see Question 76), expenditure estimates (see Question 77), or revenue estimates (see Question 80). These documents should ideally be published at the mid-point of the fiscal year; however, it is also acceptable if they only cover the first four or five months of the fiscal year.

1) The case of Japan in OBS 2019
Japan in FY2018 published a Mid-year Economic Projection and Outline of the Mid-Year Economic Projection, at the four-month point in their fiscal year, which includes an updated macroeconomic forecast for the remainder of the FY 2018. While the documents contain one line of aggregate expenditures and revenues, with an updated forecast for the remainder of the year, the researcher argues that the purpose of the document is only to update the macroeconomic forecasts, and has no impact on the implementation of the budget or any adjustments on fiscal policies or budget implementation. Based on this assessment, consistent to the OBS 2017 score, neither of these documents is being considered as the Mid-Year Review in the OBS 2019 and the document status is ‘not produced’.

2) The case of Sri Lanka in OBS 2019
In Sri Lanka, the government published a Mid-Year Fiscal Position Report for FY2018, with budget execution information for actual expenditures and revenues at the four-month point, and some information on global projections of macroeconomic conditions. However, since the document doesn’t include forward-looking projections for the remainder of the fiscal year for either expenditures, revenues or the national macroeconomic forecast, it is not considered as a MYR in OBS 2019. This document has been published every year, by law, by the government, however the OBS has not considered it as an MYR as of OBS 2012.

3) The case of South Korea in OBS 2019
South Korea issues a revised macroeconomic forecast in the middle of their fiscal year – the “Economic Conditions and Policy Direction in the Second Half” with a minister’s speech. Along with a revised macroeconomic, the document also includes new policy proposals for that fiscal year, however it has no fiscal figures (expenditures or revenues) and does not discuss the impact of the proposed policies on overall fiscal figures. For this reason, it is not considered a MYR in OBS 2019.

4) The case of Moldova in OBS 2019
In Moldova in OBS 2019, the Ministry of Finance released a “Mid-Year Review” that is essentially a 6-month implementation report. Since it has no updated figures, it scores a 0 on all of the MYR questions in Section 3 (Questions 76-83). Normally, this would mean that we don’t consider this document a MYR by OBS standards, but on the very last page there is a statement: Prospects for the implementation of the national public budget by the end of the year

As mentioned in the Introduction, following updated forecasts from in March, the BPN's budgets have been changed (Laws 101/2018, 107/2018, 108/2018) compared to the originally approved budgets. Thus, in the context of the execution of the part of the revenues and expenditures of the budgets are good prospects for full implementation of the expenditure framework foreseen in the budget law for the current year without initiating a new budget change.

Despite this statement, we decided not to accept this document as publicly available. In the comment section, we wrote that the document exists and that it makes reference to some MYR elements, but does not contain any of the necessary budget info

5) Can we consider a document as both a MYR and a supporting document to the EBP?
In Peru in OBS 2019, we are accepting the “MARCO MACROECONÓMICO MULTIANUAL 2019-2022” (published in August 2018) as a MYR. This document is also considered part of the EBP package. We consider it appropriate to consider this document both as part of the EBP package and as the MYR.

6) How do we assess timeliness for MYRs that cover less than 6 months of the first half of the fiscal year?
We measure the timeliness of the document based on when the reporting period ends. So if the Mid-Year Review only covers the first four months of the fiscal year, we could score this document "a" only if the MYR was issued within six weeks after the end of those four months.

7) What if COVID prevented the publication of the a key budget document?
Even if the COVID crisis prevented the publication of a key budget document, we are not considering it to be an exceptional circumstance because of which we could look back to assess the document from a previous fiscal year. Many governments worked hard to ensure publication of budget documents, even during the pandemic, though these documents were at times less comprehensive and timely than usual. We would not want to give credit to a country that did not publish a document during the pandemic while penalizing a country that did publish a document, just one that is less comprehensive. In addition, it is difficult to pinpoint when COVID prevented a document's publication. Finally, COVID impacted all countries in the survey, unlike the usual exceptions allowed in the survey (a one-time election in a country, for example).

Note: One country that is still under discussion is Canada. The Government of Canada was set to present their budget for 2020/21 budget in late March 2020, before it was postponed in mid-March because of the pandemic. It was pushed back a few times, before finally being postponed indefinitely in early May. This continued for the rest of 2020. Between 12 March 2020 and 30 December 2020 the Parliament passed 12 spending or tax bills. A number of these (if not a majority) are the legislation that we are considering Canada’s emergency fiscal policy package in the COVID Module. While there was no budget proposal for 2020/21, the Government did publish a Fall Economic Statement 2020 in November – this is the document that we will consider as the MYR for 2020/21 and the PBS for 2021/22. Canada also presented an “Economic and Fiscal Snapshot 2020” in July, which was a new document that focused on the Government’s fiscal response to COVID (and we use heavily in the COVID Module).

Because Canada's lack of publication of these budget documents was not a transparency issue but rather a calculated response to the pandemic - particularly in the case of the budget proposal - it is still under team discussion.

8) Can an MYR also be used as a PBS and/or YER?
This discussion comes from OBS 2019, but applies also to OBS 2021.

The document is Jamaica’s “Fiscal Policy Paper 2018/19, Interim Report.” It is currently the MYR. As the PBS: As the YER: Resolution: In OBS 2019 and OBS 2021, this document was accepted as both the MYR and YER in Jamaica, but not the PBS.
 * We are not inclined to accept this document as the PBS because it’s core intent is not forward-looking.
 * This document mainly focuses on the fiscal year in which it is published, not the upcoming year.
 * It does contain macroeconomic forecasts for the PBS year. (Pages 16-17)
 * It does not discuss policies for the PBS year.
 * It barely acknowledges the PBS year at all (only one real mention of in the narrative (Page 17)).
 * We are somewhat inclined to accept this document as the YER.
 * It only devotes about 2 to 3 pages to the YER year. (Pages 19-21)
 * It does contain tables and discussion for the YER year.
 * It does compare budgeted to actuals for the YER year.

9) What documents can be considered supporting to the MYR?
In Jamaica in OBS 2019, we wondered if the “Supplementary Estimates” document could be considered as part of the MYR.
 * It gives a more detailed picture of the revisions (expenditure) shown in the MYR.
 * It is tabled simultaneously alongside the MYR.
 * The MYR mentions it by name.
 * This is the first time it has been created.
 * Why do we care? It would change Q78 to an A-score because it also gives Administrative and Functional Classifications. (It is not useful for other indicators).

Resolution: We did not accept this document as a supporting document to the MYR as it seemed to be related to a supplementary budget, and not to a normal budget update. On page 5 of the FPP, it says: "Given the emergence of a number of critical expenditure pressures a First Supplementary Budget has been prepared."