An adjustment with headwinds is always more onerous and can undermine the credibility of the fiscal consolidation process when the goals are set in terms of GDP ratio. The variables in the ratio suffer the adverse effect of factors that cannot be controlled by fiscal policy-makers, and may create the perception that the adjust failed.
For this reason, I have maintained that the adjustment programmes’ fiscal goals should be set in the form of limits to nominal public spending, goals that are controllable by the fiscal policy-makers and that thereby allow a real assessment of the results achieved and the consequent accountability for failures.