## 1. Supply Chain Disruptions

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### Trade and Consumption Shifts
- International travel and rotation of consumption out of durables and back into services since 2022 have narrowed the global balance.
- COVID-19 factors widened the global balance temporarily during the pandemic through elevated transportation costs and trade in medical goods.
- ESR sample-economy estimates:
  - 2021: COVID-19 factors could have contributed 0.63 percent of global GDP to the post-COVID-19 increase in the global balance.
  - 2023: withdrawal of such factors is estimated to have contributed 0.1 percent of global GDP to the narrowing of the global balance relative to 2022.
- Import-impact estimation note:
  - Estimates apply import content shares from Hale and others 2019 for the United States, scaled by the percentage of foreign value added in domestic demand (OECD TiVA) for other countries, comparing actual consumption of durables, nondurables, and services to 2019 shares.

### Commodity Prices and Trade Balances
- Reversal of peak current account surpluses in commodity-exporting countries in 2022 contributed to narrowing of the global balance in 2023.
  - Commodity exporters as a group reduced current account surpluses by 0.55 percent of world GDP in 2023 as saving declined to buffer the impact of declining commodity prices.
- Terms-of-trade shifts:
  - The outsized fall in gas prices in Europe in 2023 decreased energy import bills and increased trade balances for the region’s gas importers.
- Real commodity prices in figures used the US consumer price index to derive real prices.

### Global Current Account and Saving Dynamics
- The narrowing of the global balance in 2023 is linked to sizable changes in private saving, which more than offset the impact of public saving on the current account.
- Fiscal policy changes, 2022–23 (cyclically adjusted fiscal balance, percentage points of potential GDP):
  - Current account deficit countries (excluding the United States) expanded fiscal positions slightly.
  - The United States expanded its fiscal position considerably relative to 2022.
  - Current account surplus countries’ fiscal positions remained broadly unchanged.
- Country-specific saving dynamics in 2023:
  - United States: decrease in the US current account deficit despite considerable fiscal loosening implies an increase in private saving.
  - China: current account surplus declined with private saving as COVID-19-era lockdowns ended.
  - Oil exporters: current account surplus and saving declined as they smoothed the impact of commodity price volatility.
- COVID-19 factor categories for ESR sample countries, 2019–23: Travel; Household (shift toward traded goods); Medical (surge in medical goods trade); Transport (surge in transportation costs); Oil (extraordinary reduction in oil demand in 2020); Other.

### Exchange Rates and Exchange Market Pressure
- US dollar and major currencies:
  - Rapid US dollar appreciation in 2022; currency markets more stable in 2023 and early 2024.
  - Strong US dollar persisted in 2023, remaining close to its post-2000 peak.
  - Q4 2023: US dollar depreciated slightly; early 2024 expectations of higher-for-longer US policy rates reversed that depreciation.
- Major currency real effective changes (2023 versus 2022 average):
  - Chinese renminbi: −9.9 percent
  - Japanese yen: −10.2 percent
  - Euro: 0.3 percent
  - Pound sterling: 4.9 percent
- Nominal effective trends among ESR countries:
  - Brazil and Mexico appreciated again in 2023 and early 2024; Argentina and Türkiye experienced significant depreciations.
- Exchange Market Pressure Index (incorporates realized exchange rate movements, policy rate changes, adjusted changes in FX reserves):
  - External pressure was considerably weaker and less one-sided in 2023 versus 2022 as monetary policy divergence subsided.
  - Twelve EBA economies faced appreciating pressure in 2023—an increase from 2022.
  - Change in inflation during 2023 was positively linked to the Exchange Market Pressure index (lower depreciation pressure in economies that reduced inflation by more).
  - Adjusted changes in FX reserves decreased appreciation pressure in Brazil, India, Poland, and Singapore, while absorbing depreciation pressure in Malaysia and Russia.
  - With inflation abating in major emerging markets, some central banks began cutting interest rates in 2023; interest rate differentials vis-à-vis the United States declined for Brazil and Poland.

### Global Financial Flows and Capital Movements
- Net capital inflows to emerging markets recovered slightly from 2022 lows but remained negative in 2023.
  - China continued to account for a large share of negative net capital inflows during 2023; inflows to other emerging markets as a group were positive and increased.
- Net inflow components in 2023:
  - Net FDI inflows declined relative to historical averages but remained positive across emerging market groups; China was an exception with negative net FDI inflows that fell further in 2023.
  - Net portfolio inflows were less negative in 2023 in both China and other emerging markets.
  - Net other investment inflows were muted in 2023, with a turn to positive net inflows in other emerging markets and a decline in China relative to 2022.
  - Reserve accumulation (presented as negative values) declined in China and increased in other emerging markets.
- Gross flows dynamics:
  - Both gross inflows (nonresident investment in EMDEs) and gross outflows (EMDE residents’ investment abroad) declined in 2023.
  - China: gross inflows have declined since 2021, with gross other investment inflows staying negative in 2022–23; sharp decline in gross FDI inflows notable; gross FDI outflows remained broadly stable.
  - Other emerging markets in 2023: gross capital inflows and outflows declined, with a more pronounced decline in outflows increasing net flows; gross portfolio inflows and outflows increased; significant heterogeneity across large emerging markets.
- Drivers of shifts in capital flows during 2023:
  - Global (push) factors: continued disinflation efforts and tight monetary policy in advanced economies constrained gross capital flows.
  - Local (pull) factors: interest differentials and less robust growth depressed inflows to some countries.
  - Geopolitical uncertainties may have contributed to reduced FDI.

---

### 1. EM (excl. China): Net Inflows

### Gross capital flow patterns and high-frequency dynamics
- EM (excl. China) showed a net inflow pattern in several recent years (percent of group GDP reported in figures).
- High-frequency gross portfolio inflows (January 2023–March 2024):
  - Inflow to emerging markets other than China in early 2024, continuing the 2023 trend.
  - Decline in inflows to China in early 2024, partly reversing the Q4 2023 recovery.
  - Metrics: three-month moving sum, billions of US dollars; US financial conditions measured by the Financial Conditions Impulse on Growth index (positive values indicate financial tightening).
- Limited global spillovers from increased tensions in the Middle East: regional inflows decreased in H2 2023 but have since recovered.

### Global balance sheets and net international investment positions
- Cross-border holdings of financial assets and liabilities remained broadly constant in 2023 relative to 2022 in percent of global GDP, while increasing in US dollar terms.
- Financial centers: 36 percent of global assets and liabilities but only 7 percent of global GDP; large net creditor position around 6 percent of global GDP.
- Net international investment positions and key changes:
  - United States: net international investment position deteriorated from −61 percent of GDP in 2022 to −71 percent in 2023.
  - Other large debtor economies: Brazil, France, India.
  - Largest creditor economies: China, Germany, Hong Kong SAR, Japan.
- Valuation changes in 2023 contributed to increasing stock imbalances:
  - Creditor countries tended to have more positive valuation changes (exception: The Netherlands).
  - Larger debtor economies tended to experience valuation losses.
  - US equity price gains led to deterioration of the US debtor position and increases in net positions of holders of US assets.
  - Currency-induced valuation effects partly offset asset-price-driven shifts (example: US valuation loss from higher domestic equity prices partially offset by valuation gain due to US dollar depreciation over the first three quarters of 2023).

### Global financial safety net
- As of end-2023, combined firepower of the global financial safety net was around $17.8 trillion.
- Federal Reserve temporary bilateral swap lines or repurchase agreement facility played a key role in stabilizing global financial markets and capital flows to emerging markets.
- People’s Bank of China swap line expansion:
  - Number of countries with active bilateral swap line agreements with the People’s Bank of China reached 31 by 2023.

### Assessment methodology and IMF staff adjustments
- Multilaterally consistent individual assessments of external positions for 30 economies covering 87.7 percent of global GDP.
- EBA methodology produces medium-term current account and real exchange rate benchmarks (norms); norms are cyclically adjusted and compared with realized levels to derive gaps.
- IMF staff combine model outputs with other indicators and country-specific adjustments; staff judgment critical.
- Sum of absolute values of current account norms stable at 1.6 percent of GDP in 2023.

### 2023 assessment results for 30 ESR economies (classification highlights)
- Moderately stronger / stronger / substantially stronger than warranted:
  - Germany, India, Malaysia, Mexico, Singapore, Sweden, Thailand, The Netherlands, Poland, Spain (The Netherlands, Poland, Spain entered this category in 2023).
- Moderately weaker / weaker / substantially weaker than warranted:
  - Argentina, Belgium, Canada, Italy, Türkiye, Korea, Saudi Arabia, Switzerland, United Kingdom (Korea, Saudi Arabia, Switzerland, United Kingdom entered in 2023).
- Broadly in line with fundamentals and desirable policies:
  - Australia, Brazil, China, the euro area, Hong Kong SAR, Indonesia, Japan, France, Russia, South Africa, United States (France, Russia, South Africa, United States entered in 2023).
- Aggregate metrics:
  - Sum of absolute values of IMF staff–assessed current account gaps remained broadly unchanged relative to 2022—close to 1 percent of ESR economy GDP.
  - Sum of absolute values of current account balances decreased by about 0.6 percentage point to about 2.4 percent of ESR GDP in 2023 compared to 2022.
  - IMF staff–assessed current account gaps are less volatile after factoring out cyclical and short-term considerations.

### Outlook and projected medium-term patterns
- Global balance projected to narrow further over the medium term, with heterogeneity across countries.
- Projections:
  - Current account surpluses in China and oil exporters projected to continue to decline as imports of services grow in China and as energy prices moderate.
  - United States current account deficit projected to contribute to narrowing of the global balance as the trade deficit continues to decline toward prepandemic levels.
- Medium-term global balance decreased by 0.2 percent of world GDP relative to the path reported in the 2023 External Sector Report.
- Creditor and debtor stock positions projected to continue to expand moderately over the medium term; projected exchange rates and asset prices are highly uncertain.

---

### ch1 — Headline Numeric Findings, Scenarios, and Risks

### Selected numeric findings for Argentina (Table 1.1 entries)
- Argentina (Billions of US Dollars): 2021: 7; 2022: −4; 2023: −22; 2024 Projection: 40.
- Argentina (Percent of World GDP): 2021: 0.01; 2022: 0.00; 2023: −0.02; 2024 Projection: 0.00.
- Argentina (Percent of GDP): 2021: 1.4; 2022: −0.7; 2023: −3.4; 2024 Projection: 0.6.

### Baseline projection assumptions and fiscal consolidation scenario
- Baseline assumptions:
  - Sizable medium-term fiscal consolidation in current account deficit countries.
  - No further escalation of geoeconomic tensions.
  - Moderating commodity prices and continued global financial stability.
- Baseline fiscal-consolidation assumption for deficit economies: gradual consolidation of 2 percent of GDP over the medium-term horizon.
- Alternative risk scenario (postponed consolidation):
  - Fiscal consolidation envisaged for 2024–25 postponed until 2026 (scenario based on Box 1.2 of the April 2024 WEO).
  - Under the risk scenario: current account deficit countries run higher deficits initially and then engage in sharper fiscal consolidation after 2026.
  - Result: global current account balance expands relative to the baseline until 2026 and thereafter shrinks faster and lower than the baseline.

### Enumerated risks to the outlook
- Delays or divergence from projected medium-term fiscal consolidation plans.
- Intensifying geoeconomic fragmentation:
  - Continued accumulation of policy measures restricting global trade and industrial policies.
  - Fragmentation could reduce trade flows, narrow the global balance, and reduce effective productivity via distorted trade in intermediate goods.
- Global spillovers from a prolonged real estate slowdown in China:
  - Depreciation of China’s housing value could contribute to a saving glut and drive up China’s current account surpluses.
  - Increased production in goods sectors (from subsidies or productivity gains) could widen the global balance.
- Abrupt tightening of financial conditions:
  - Sudden repricing of risk could trigger capital outflows, sharp exchange rate adjustments, and balance-of-payments crises for countries with weak buffers and high foreign-currency debt.
  - IMF staff estimate: three-quarter-ahead portfolio debt outflows across emerging markets (excluding China) at the fifth percentile will be 2.3 percent of GDP, with a probability of outflows at about 27 percent.
- Rising commodity prices (energy price hikes) from renewed supply chain pressures, Middle East conflict, terrorism disruptions, or climate disasters.
- Climate change and the clean energy transition:
  - Natural disasters deteriorate the current account for disaster-prone economies.
  - Transition policies could reshape commodity prices and trade flows with diverging impacts across countries.

---

### CHAPTER 1 — Policy Priorities and Country-Tailored Recommendations

### Overarching rationale and collective action
- Excess current account balances can signal inefficient resource allocation and, when paired with negative NIIPs, increase risks of sudden stops and capital flow reversals.
- Correcting excess balances can improve welfare, reduce reversal risks, and preserve support for multilateralism.
- Central banks should ensure the right timing of monetary policy easing—confirm wage and price pressures are dissipating before easing.
- Fiscal consolidation, where warranted, should rebuild budgetary room and curb public debt rises while protecting critical infrastructure investment and well-targeted social spending.

### Managing capital flow volatility and FX risks
- Use the IMF’s Integrated Policy Framework and the revised Institutional View on Capital Flows (IMF 2023) to guide responses depending on country circumstances.
- Policy guidance by country circumstances:
  - Economies with deep FX markets, low foreign-currency mismatches, and well-anchored inflation expectations: adjust the policy rate and allow exchange rate flexibility.
  - Economies with shallow FX markets, large FX mismatches, or risk of de-anchoring inflation expectations: temporary FX interventions or loosening capital flow management measures on inflows may be appropriate.
- Macroprudential measures and temporary FX interventions should not substitute for warranted macroeconomic adjustments.

### Multilateral cooperation and global liquidity
- Maintain stable and transparent trade policies; avoid discriminatory policies that induce trade and investment distortions.
- Safeguard transportation of critical minerals; restore WTO dispute settlement capacity; ensure responsible use of disruptive technologies such as artificial intelligence.
- Coordinate on industrial-policy design, orderly debt resolution, and climate mitigation support for the green energy transition.
- Maintain liquidity in the global financial system; IMF precautionary financial arrangements and the 16th Review of Quotas (and subsequent consent to quota increases) will increase IMF liquidity.

### Policies tailored to country external positions (high-level prescriptions)
- Weaker-than-warranted external positions:
  - Boost saving and competitiveness; credible fiscal consolidation when high public debt contributes; protect infrastructure and well-targeted social spending; structural reforms to raise productivity.
- Stronger-than-warranted external positions:
  - Promote investment and diminish excess saving to support external rebalancing while pursuing domestic objectives (examples: Germany, Sweden, Singapore; policies include higher fiscal deficits for public investment and stronger social safety nets).
- Broadly in line with fundamentals:
  - Continue to address domestic imbalances; examples:
    - China: accelerate market-based reforms, shift fiscal support toward social protection, increase exchange rate flexibility.
    - United States: pursue medium-term fiscal consolidation to stabilize public debt-to-GDP ratio.

### Selected country-level recommendation highlights (from Annex Table 1.1.6)
- Argentina (Weaker): continue stabilization plan with strong fiscal anchor and relative price corrections; implement structural reforms; gradually ease CFM measures as stability returns.
- Australia (Broadly in line): maintain fiscal and monetary restraint; implement structural policies to boost investment.
- Germany (Stronger): promote investment and reduce excess saving; higher fiscal deficits over the medium term to fund green transition, digitalization, transport infrastructure.
- Singapore (Substantially stronger): execute planned major green infrastructure projects; strengthen social safety nets; increase public investment in health care, green and physical infrastructure, and human capital.
- United States (Broadly in line): implement medium-term fiscal consolidation; structural policies to increase competitiveness and maintain full employment.

---

### Box 1.2 — Geoeconomic Fragmentation and the Global Balance (summary of model results)
- Trade fragmentation (modeled as a permanent 50 percent increase in NTBs over 10 years):
  - Decreases the global balance by 0.36 percentage point of global GDP over the medium term (fifth period).
  - Global medium-term real output declines by 3 percent relative to the baseline.
  - Global trade volumes decline by about 9 percent relative to the baseline.
  - All regions contribute to narrowing the global balance except OAE and EUR in the US bloc.
- Financial fragmentation (modeled as a 50 basis point decline in the premium paid by the China bloc on US Treasuries):
  - In the China bloc: medium-term investment increases, saving decreases, interest rate decreases, and the current account declines.
  - In the US bloc: investment decreases, interest rate and saving increase, and the current account increases.
  - Financial fragmentation narrows the global balance by 0.24 percent of global GDP, with the largest contributions from China and the United States.
- Synthesis:
  - Both trade and financial fragmentation can narrow the global current account balance over the medium term, but the magnitude and regional contributors depend on the fragmentation channel.

_Italicized source: ch1 - 2024 External Sector Report (chapter content provided)._

### 1. Supply Chain Disruptions

### 1. Supply Chain Disruptions

### Trade and Consumption Shifts
- International travel and the rotation of consumption out of durables and back into services since 2022 have narrowed the global balance.
- COVID-19 factors (elevated transportation costs and trade in medical goods) widened the global balance temporarily during the pandemic.
- Analysis for ESR sample economies:
  - In 2021, COVID-19 factors could have contributed 0.63 percent of global GDP to the post-COVID-19 increase in the global balance.
  - In 2023, the withdrawal of such factors is estimated to have contributed 0.1 percent of global GDP to the narrowing of the global balance relative to 2022.
- The impact on imports from the shift in consumption to durables and nondurables is plotted in percent of country GDP (panel 2 notes): estimates apply import content shares from Hale and others 2019 for the United States, scaled by the percentage of foreign value added in domestic demand (OECD TiVA) for other countries, comparing actual consumption of durables, nondurables, and services to 2019 shares.

### Commodity Prices and Trade Balances
- Reversal of peak current account surpluses in commodity-exporting countries in 2022 contributed to the narrowing of the global balance in 2023.
  - Commodity exporters as a group reduced current account surpluses by 0.55 percent of world GDP in 2023, as saving declined to buffer the economic impact of declining commodity prices.
- Terms-of-trade shifts from commodity price adjustments materially affected external balances for commodity importers:
  - The outsized fall in gas prices in Europe in 2023 decreased energy import bills and increased trade balances for the region’s gas importers.
- Real commodity prices and indices referenced in figures (panel 3) used the US consumer price index to derive real prices.

### Global Current Account and Saving Dynamics
- The narrowing of the global balance in 2023 is linked to sizable changes in private saving, which more than offset the impact of public saving on the current account.
- Fiscal policy changes, 2022–23 (cyclically adjusted fiscal balance, percentage points of potential GDP):
  - Current account deficit countries (excluding the United States) expanded fiscal positions slightly.
  - The United States expanded its fiscal position considerably relative to 2022.
  - Current account surplus countries’ fiscal positions remained broadly unchanged.
- Changes in government saving in 2023 were surpassed by changes in private sector saving for key contributors to the global balance—China, the United States, and oil exporters:
  - On the current account deficit side, the decrease in the US current account deficit despite considerable fiscal loosening implies an increase in private saving.
  - The current account surplus declined with private saving in China, albeit from a high level, reflecting the end of COVID-19-era lockdowns.
  - For oil exporters, the current account surplus and saving declined as they smoothed the impact of commodity price volatility.
- COVID-19 factor contributions to the global balance for ESR sample countries, 2019–23 (panel 3):
  - Categories include Travel, Household (shift toward traded goods), Medical (surge in medical goods trade), Transport (surge in transportation costs), Oil (extraordinary reduction in oil demand in 2020), and Other.

### Exchange Rates and Exchange Market Pressure
- US dollar dynamics:
  - Following rapid US dollar appreciation in 2022, currency markets were more stable in 2023 and early 2024.
  - The strong US dollar persisted in 2023, remaining close to its post-2000 peak.
  - In Q4 2023 the US dollar depreciated slightly; early 2024 expectations of higher-for-longer US policy rates reversed that depreciation.
- Major currency real effective changes (2023 versus 2022 average):
  - Chinese renminbi: –9.9 percent (depreciation in real effective terms).
  - Japanese yen: –10.2 percent (depreciation in real effective terms).
  - Euro: 0.3 percent (broadly stable in real effective terms).
  - Pound sterling: 4.9 percent (appreciation).
- Nominal effective exchange rate trends for ESR countries in 2023 and early 2024 generally followed 2022 dynamics:
  - Some EMDEs (e.g., Brazil and Mexico) appreciated again in 2023 and early 2024.
  - Others (e.g., Argentina and Türkiye) experienced significant depreciations.
- Exchange market pressure and policy responses:
  - The realized change in exchange rates is an imperfect measure of external pressures because interest rate changes and adjusted changes in FX reserves can cushion pressures.
  - The Exchange Market Pressure Index incorporates realized exchange rate movements, policy rate changes, and adjusted changes in FX reserves (positive values correspond to pressure that would depreciate the nominal exchange rate).
  - External pressure was considerably weaker and less one-sided in 2023 versus 2022 as monetary policy divergence subsided.
  - Twelve EBA economies faced appreciating pressure in 2023—an increase from 2022—potentially reflecting emerging markets’ resilience and improved policy frameworks.
  - Change in inflation during 2023 was positively linked to the Exchange Market Pressure index, with lower depreciation pressure in economies that reduced inflation by more.
  - Adjusted changes in FX reserves decreased appreciation pressure in Brazil, India, Poland, and Singapore, while absorbing depreciation pressure in Malaysia and Russia.
  - With inflation abating in major emerging markets, some central banks began cutting interest rates in 2023; interest rate differentials vis-à-vis the United States declined for Brazil and Poland.

### Global Financial Flows and Capital Movements
- Net capital inflows to emerging markets recovered slightly from 2022 lows but remained negative in 2023, indicating uphill capital flows.
  - Aggregate emerging market trend conceals heterogeneity across countries.
  - China continued to account for a large share of negative net capital inflows during 2023; inflows to other emerging markets as a group were positive and increased.
- Net capital inflow components in 2023:
  - Net FDI inflows declined relative to historical averages but remained positive across emerging market groups; China was an exception with negative net FDI inflows that fell further in 2023.
  - Net portfolio inflows were less negative in 2023 in both China and other emerging markets.
  - Net other investment inflows were muted in 2023, with a turn to positive net inflows in other emerging markets and a decline in China relative to 2022.
  - Reserve accumulation (presented as negative values) declined in China and increased in other emerging markets.
- Gross flows dynamics:
  - Both gross inflows (nonresident investment in EMDEs) and gross outflows (EMDE residents’ investment abroad) declined in 2023.
  - China:
    - Gross inflows have declined since 2021, with gross other investment inflows staying negative in 2022–23.
    - Sharp decline in gross FDI inflows stands out historically.
    - Gross FDI outflows remained broadly stable and in line with historical trends, leading to large negative net inflows for this component.
  - Other emerging markets in 2023:
    - Gross capital inflows and outflows declined, with a more pronounced decline in outflows increasing net flows.
    - Net FDI inflows remained relatively resilient due to comparable declines in gross FDI inflows and gross FDI outflows.
    - Gross portfolio inflows and outflows increased in 2023.
    - Other gross outflows moderated relative to 2022, contributing to recovery of net other capital inflows.
    - Significant heterogeneity observed across large emerging markets, with some destinations recording sizable increases in both FDI and non-FDI inflows relative to prepandemic trends.
- Drivers of observed shifts in capital flows during 2023:
  - Global (push) factors: continued disinflation efforts and tight monetary policy in advanced economies constrained gross capital flows.
  - Local (pull) factors: interest differentials and less robust growth may have depressed inflows to some countries.
  - Geopolitical uncertainties may have contributed to reduced FDI.

*Source: ch1 - 1. Supply Chain Disruptions (PDF chapter).*

### 1. EM (excl. China): Net Inflows

### 1. EM (excl. China): Net Inflows

### Gross capital flow patterns in emerging markets and China
- Figure 1.10 documents gross capital flows in emerging market and developing economies, 2014–23, distinguishing FDI, portfolio, other, reserves, and total (note: net capital inflows = gross inflow minus gross outflow; total includes reserve accumulation with a negative sign; derivatives excluded).
- EM (excl. China) showed a net inflow pattern in several recent years (percent of group GDP reported in figure).
- China’s net inflows series (percent of GDP) displays larger swings than the EM (excl. China) group (figure series shown for 2014–23).

### High-frequency gross portfolio inflows (January 2023–March 2024)
- High-frequency gross portfolio inflows indicate:
  - An inflow to emerging markets other than China in the first few months of 2024, continuing the 2023 trend.
  - A decline in inflows to China in early 2024, partly reversing the recovery in the fourth quarter of 2023.
- These dynamics are linked to fluctuations in US financial conditions:
  - Optimism in financial markets and the limited depreciation of the US dollar in Q4 2023 helped rekindle capital inflows to emerging markets in Q4 2023 and Q1 2024.
- There have been fairly limited global spillovers in capital flows from increased tensions in the Middle East; regional inflows decreased in H2 2023 but have since recovered.
- Chart metrics: three-month moving sum, billions of US dollars; US financial conditions measured by the Financial Conditions Impulse on Growth index (positive values indicate financial tightening).

### Global balance sheets and net international investment positions
- Global cross-border holdings of financial assets and liabilities remained broadly constant in 2023 relative to 2022 in percent of global GDP, while increasing in US dollar terms.
- Financial centers represented 36 percent of global assets and liabilities but only 7 percent of global GDP.
- Financial centers have a large net creditor position as a group, around 6 percent of global GDP.
- Net foreign creditor and debtor positions expanded in 2023, with:
  - The United States remaining the largest debtor economy; US net international investment position deteriorated from –61 percent of GDP in 2022 to –71 percent in 2023.
  - Other large debtor economies: Brazil, France, and India.
  - Largest creditor economies: China, Germany, Hong Kong Special Administrative Region, and Japan.
- Valuation changes contributed to increasing stock imbalances in 2023:
  - Creditor countries tended to have more positive valuation changes (notable exception: The Netherlands).
  - Larger debtor economies tended to experience valuation losses.
  - US equity price gains led to a deterioration of the US debtor position and increases in net positions of countries holding US assets.
  - Currency-induced valuation effects tended to partly offset asset-price-driven shifts (example: in the United States the valuation loss from higher domestic equity prices was only partially offset by a valuation gain due to US dollar depreciation over the first three quarters of 2023).

### Global financial safety net
- The global financial safety net provides insurance, financing, and policy incentives and comprises four layers: central banks’ foreign exchange reserves, central banks’ bilateral swap arrangements, regional financing arrangements, and the IMF.
- As of end-2023, the global financial safety net represented a combined firepower of around $17.8 trillion.
- The Federal Reserve’s temporary bilateral swap lines or repurchase agreement facility for foreign and international monetary authorities played a key role in stabilizing global financial markets and capital flows to emerging market economies.
- The People’s Bank of China has expanded swap lines rapidly over the last 1½ decades:
  - Number of countries with active bilateral swap line agreements with the People’s Bank of China reached 31 by 2023.
  - Sum of active BSL amounts and number of countries plotted for 2009–23 (figure).

### Assessment methodology and IMF staff adjustments
- The report presents multilaterally consistent individual assessments of external positions for 30 of the world’s largest economies (87.7 percent of global GDP).
- The EBA methodology produces medium-term current account and real exchange rate benchmarks (norms) consistent with country fundamentals and desirable policies; norms are cyclically adjusted and compared with realized levels to derive gaps (measures of excess external balances).
- IMF staff combine model outputs with other external indicators, analytically grounded adjustments, and country-specific insights to reach holistic staff assessments.
- IMF staff judgment plays a critical role; adjustors for country-specific factors (measurement issues, natural disasters, net international investment position considerations, lingering pandemic effects) are included and continued to shrink relative to 2022.
- The EBA current account norm components highlighted include: net foreign assets, demographics, oil, other fundamentals, and desirable policies. The summed absolute value of current account norms was stable at 1.6 percent of GDP in 2023.

### Assessment results for 2023 (classification of 30 ESR economies)
- Category: Moderately stronger, stronger, or substantially stronger than warranted:
  - Germany, India, Malaysia, Mexico, Singapore, Sweden, Thailand, The Netherlands, Poland, Spain (The Netherlands, Poland, and Spain entered this category in 2023).
- Category: Moderately weaker, weaker, or substantially weaker than warranted:
  - Argentina, Belgium, Canada, Italy, Türkiye, Korea, Saudi Arabia, Switzerland, United Kingdom (Korea, Saudi Arabia, Switzerland, and the United Kingdom entered this category in 2023).
- Category: Broadly in line with fundamentals and desirable policies:
  - Australia, Brazil, China, the euro area, Hong Kong SAR, Indonesia, Japan, France, Russia, South Africa, United States (France, Russia, South Africa, and the United States entered this category in 2023).
- Compared with 2022, assessments changed for about half of the 30 ESR economies, largely driven by changes in headline current accounts; about half of the economies that changed assessment moved farther away from “broadly in line.”
- Aggregate metrics:
  - The sum of the absolute values of IMF staff–assessed current account gaps remained broadly unchanged relative to 2022—close to 1 percent of ESR economy GDP.
  - The sum of the absolute values of current account balances decreased by about 0.6 percentage point to about 2.4 percent of ESR GDP in 2023 compared to 2022.
  - Cyclical factors played a major role in large headline current account fluctuations; IMF staff–assessed current account gaps are less volatile after factoring out cyclical and short-term considerations.

### Outlook and risks
- The global balance is projected to narrow further over the medium term, with heterogeneity across countries.
- Projections:
  - Current account surpluses in China and oil exporters are projected to continue to decline as imports of services grow in China and as energy prices moderate.
  - The United States current account deficit is projected to contribute to a narrowing of the global balance as the trade deficit continues to decline toward prepandemic levels.

*Source: 2024 EXTERNAL SECTOR REPORT (chapter content provided).*

### 2023. Coverage of Argentina in the External Sector Report started in 2018.

### ch1 - 2023. Coverage of Argentina in the External Sector Report started in 2018.

### Evolution of headline current account balances and IMF staff gaps
- The decline in the global balance is dampened by the projected widening of the current account deficit in several deficit emerging markets, including Brazil, India, Indonesia, and Mexico.
- The medium-term global balance is supported by moderating commodity prices and projected medium-term fiscal consolidation in current account deficit countries, including the United States.
- The medium-term global balance has decreased by 0.2 percent of world GDP relative to the path reported in the 2023 External Sector Report.
- Creditor and debtor stock positions are projected to continue to expand moderately over the medium term; projected exchange rates and asset prices are highly uncertain and could cause substantial deviations from baseline projections.
- The debtor position of European economies is projected to improve over the medium term on the back of persistent current account surpluses and declining deficits.
- Note: Bubble sizes in the referenced figure are proportional to 2023 GDP in US dollars. The headline CA for 2024 is a projection.

### Key numeric findings from Table 1.1 (Selected Economies: Current Account Balance, 2021–24)
- Argentina (Billions of US Dollars): 2021: 7; 2022: −4; 2023: −22; 2024 Projection: 40.
- Argentina (Percent of World GDP): 2021: 0.01; 2022: 0.00; 2023: −0.02; 2024 Projection: 0.00.
- Argentina (Percent of GDP): 2021: 1.4; 2022: −0.7; 2023: −3.4; 2024 Projection: 0.6.
- Global Current Account Balance (presented in the table): 3,4484,0793,19231423.64.13.12.9. . .. . .. . .. . .
- Statistical Discrepancy (presented in the table): 9174455514530.90.40.50.4. . .. . .. . .. . .
- Overall Surpluses (presented in the table): 2,1832,2601,87418522.32.21.81.7. . .. . .. . .. . .
- Overall Deficits (presented in the table): −1,265−1,816−1,324−1399−1.3−1.8−1.3−1.3. . .. . .. . .. . .

### Baseline projection assumptions and fiscal consolidation scenario
- Baseline assumes sizable medium-term fiscal consolidation in current account deficit countries, no further escalation of geoeconomic tensions, moderating commodity prices, and continued global financial stability.
- Current account deficit economies are projected to embark on a gradual fiscal consolidation of 2 percent of GDP over the medium-term horizon.
- An alternative risk scenario assumes fiscal consolidation envisaged for 2024–25 is postponed until 2026 (scenario based on Box 1.2 of the April 2024 World Economic Outlook).
  - Under that risk scenario, current account deficit countries run higher deficits in fiscal and current accounts initially and then engage in sharper fiscal consolidation after 2026 than under the baseline.
  - Result: the global current account balance expands relative to the baseline until 2026 and thereafter shrinks faster and lower than the baseline.

### Risks surrounding the outlook (enumerated)
- Divergence from projected medium-term fiscal consolidation plans (delays could magnify fiscal vulnerabilities, increase sovereign spreads and public debt, and heighten external stress risks).
- Intensifying geoeconomic fragmentation:
  - Policy measures restricting global trade and industrial policies have continued to accumulate.
  - Intensified fragmentation could reduce trade flows and narrow the global balance over the medium term.
  - Fragmentation negatively impacts effective productivity by distorting trade in intermediate goods, more so for countries closely integrated in global value chains across unfriendly blocs.
- Global spillovers from a prolonged real estate slowdown in China:
  - Depreciation of China’s housing value could contribute to a saving glut and drive up China’s current account surpluses, widening the global current account balance.
  - Increased production in goods sectors (from subsidies or productivity gains) could also widen the global balance.
- An abrupt tightening of financial conditions:
  - A sudden repricing of risk could trigger capital outflows, sharp exchange rate adjustments, and balance-of-payments crises for countries with weak buffers and high foreign currency debt.
  - A particular risk stems from higher-for-longer policy rates in the United States, which could reduce policy rate differentials in emerging markets.
  - IMF staff estimates: three-quarter-ahead portfolio debt outflows across emerging markets (excluding China) at the fifth percentile will be 2.3 percent of GDP, with a probability of outflows at about 27 percent.
- Rising commodity prices:
  - Energy price hikes could be triggered by renewed supply chain pressures precipitated by the war in Ukraine, the Middle East conflict, terrorism disruptions to trade, or climate disasters.
  - EMDEs that are energy importers and have low buffers are particularly vulnerable; rising commodity prices have historically been linked to a widening global balance.
- Climate change and clean energy transition:
  - Natural disasters deteriorate the current account after a climate disaster for disaster-prone economies.
  - Implementation of climate mitigation policies and the transition to clean energy could reshape commodity prices and trade flows, with diverging impacts across countries (fossil fuel exporters vs. green metals exporters).

### Additional quantitative and illustrative points
- The medium-term global balance has decreased by 0.2 percent of world GDP relative to the path reported in the 2023 External Sector Report.
- Fiscal policy change (cyclically adjusted fiscal balance) and impact of fiscal policy on the global current account balance are presented for 2023–28 in the referenced IMF Group of Twenty model simulations (figures summarized in the source).
- Trade interventions: the number of net harmful trade restrictions by policy instrument is shown for 2009–23 and indicates accumulation of trade interventions, industrial policy measures, and COVID-19–related interventions (data published on May 16, 2024).

*Source: IMF staff calculations, from ch1 - 2023. Coverage of Argentina in the External Sector Report started in 2018.*

### CHAPTER 1 ExtErnal PosItIons and PolIcIEs

### CHAPTER 1 ExtErnal PosItIons and PolIcIEs

### Net International Investment Positions: Key Figures and Patterns
- Selected economy NIIP, Billions of US Dollars and percent of GDP (selected entries from Table 1.2):
  - United States: −14,721 (2020), −18,783 (2021), −16,172 (2022), −19,768 (2023); −17.3 percent (2020), −19.4 percent (2021), −16.1 percent (2022), −18.9 percent (2023); −66.8 (2020), −76.2 (2021), −61.2 (2022), −70.7 (2023)
  - Germany: 2,640 (2020), 2,782 (2021), 2,881 (2022), 3,120 (2023); 3.1 percent (2020), 2.9 percent (2021), 2.9 percent (2022), 3.0 percent (2023); 68.0 (2020), 65.0 (2021), 70.5 (2022), 70.0 (2023)
  - China: 2,287 (2020), 2,186 (2021), 2,427 (2022), 2,914 (2023); 2.7 percent (2020), 2.3 percent (2021), 2.4 percent (2022), 2.8 percent (2023); 15.4 (2020), 12.3 (2021), 13.6 (2022), 16.5 (2023)
  - Japan: 3,465 (2020), 3,678 (2021), 3,091 (2022), 3,372 (2023); 4.1 percent (2020), 3.8 percent (2021), 3.1 percent (2022), 3.2 percent (2023); 68.5 (2020), 73.1 (2021), 72.6 (2022), 80.0 (2023)
  - United Kingdom: −250 (2020), −440 (2021), −443 (2022), −1,037 (2023); −0.3 percent (2020), −0.5 percent (2021), −0.4 percent (2022), −1.0 percent (2023); −9.3 (2020), −14.0 (2021), −14.3 (2022), −31.0 (2023)
  - Brazil: −552 (2020), −601 (2021), −824 (2022), −976 (2023); −0.6 percent (2020), −0.6 percent (2021), −0.8 percent (2022), −0.9 percent (2023); −37.4 (2020), −36.0 (2021), −42.2 (2022), −44.9 (2023)
  - Russia: 517 (2020), 485 (2021), 760 (2022), 847 (2023); 0.6 percent (2020), 0.5 percent (2021), 0.8 percent (2022), 0.8 percent (2023); 34.7 (2020), 26.3 (2021), 33.4 (2022), 42.4 (2023)
- Memorandum and aggregates:
  - Overall Creditors: 20,170 (2020), 21,006 (2021), 20,095 (2022), 22,197 (2023); 23.7 percent (2020), 21.7 percent (2021), 20.0 percent (2022), 21.2 percent (2023)
  - Of which: Advanced Economies (creditors): 16,089 (2020), 17,063 (2021), 15,610 (2022), 17,283 (2023); 18.9 percent (2020), 17.6 percent (2021), 15.5 percent (2022), 16.5 percent (2023)
  - Overall Debtors: −24,052 (2020), −27,932 (2021), −25,249 (2022), −29,007 (2023); −28.3 percent (2020), −28.9 percent (2021), −25.1 percent (2022), −27.8 percent (2023)

### Policy Priorities for Promoting External Rebalancing
- Overarching rationale:
  - Excess current account balances can signal inefficient resource allocation and, when paired with negative net international investment positions, increase risks of sudden stops and reversals in capital inflows and fuel discontent toward multilateralism.
  - Correcting excess balances can improve welfare, reduce risks of disruptive capital flow reversals, and preserve support for multilateralism.
- Collective action and macro policy calibration:
  - Central banks should ensure right timing of monetary policy easing, confirming wage and price pressures are dissipating before easing.
  - Fiscal consolidation, where warranted, would help rebuild budgetary room and curb public debt rises; consolidation should protect critical infrastructure investment and well-targeted social spending.
  - Policy priorities from the April 2024 World Economic Outlook would help rebalance external positions and contain risks, including fiscal consolidation in large economies with excessive deficits (example countries cited: Italy and the United Kingdom).
- Managing capital flow volatility and FX risks:
  - As central bank policies become less synchronous, divergences in interest rates could spur capital flows and high FX volatility.
  - Guidance from the IMF’s Integrated Policy Framework and the revised Institutional View on Capital Flows (IMF 2023) should guide responses depending on country circumstances.
  - For economies with deep FX markets, low foreign-currency mismatches, and well-anchored inflation expectations: adjust the policy rate and allow exchange rate flexibility.
  - For economies with shallow FX markets, large FX mismatches, or risk of de-anchoring inflation expectations: temporary FX interventions or loosening capital flow management measures on inflows may be appropriate to keep FX markets functioning while maintaining appropriate monetary and fiscal settings.
  - Macroprudential policies, including pre-emptive capital flow management measures/macroprudential measures where appropriate, should reduce vulnerabilities from large exposure to foreign-currency–denominated debt.
  - Temporary FX interventions and capital flow management measures should not substitute for warranted macroeconomic adjustments or development of domestic macroprudential policies.
- Multilateral cooperation and global liquidity:
  - Coordinated policy efforts and multilateral cooperation are critical to mitigate geoeconomic fragmentation and preserve benefits of multilateralism.
  - Maintain stable and transparent trade policies; avoid discriminatory policies that induce trade and investment distortions.
  - Safeguard transportation of critical minerals, restore the World Trade Organization’s dispute settlement capacity, and ensure responsible use of disruptive technologies such as artificial intelligence.
  - International coordination is important for the appropriate use and design of industrial policies, orderly resolution of debt problems in a complex creditor landscape, and mitigating climate change and facilitating the green energy transition.
  - Maintaining liquidity in the global financial system is essential; IMF precautionary financial arrangements and the 16th Review of Quotas (and subsequent consent to quota increases) will increase IMF liquidity and strengthen the IMF’s capacity to safeguard global financial stability.

### Policies Tailored to Country External Positions
- Economies with weaker-than-warranted external positions:
  - Focus on policies that boost saving and competitiveness.
  - Where high public debt contributes (examples: Belgium and Italy), enact credible fiscal consolidation to create space for green and digital transformations.
  - For economies with low reserves and elevated gross external financing needs (example: Türkiye), fiscal consolidation should protect infrastructure and well-targeted social spending (example: Argentina).
  - Address structural bottlenecks via labor market and other structural reforms to promote green, digital, and inclusive growth and boost productivity.
- Economies with stronger-than-warranted external positions:
  - Prioritize promoting investment and diminishing excess saving to support external rebalancing while pursuing domestic objectives.
  - Example: Germany may require higher fiscal deficits over the medium term to ensure adequate public investment for the green transition, digitalization, and transport infrastructure, which would also reduce the current account balance toward its norm.
  - Example: Sweden should increase private and public investment in the green transition and the health sector as inflation recedes to lower the external balance and address demographic challenges.
  - Emerging markets (examples: Malaysia, Mexico, Thailand) should tackle informality and expand social safety nets (including public health care where appropriate) to encourage investment and reduce precautionary saving.
- Economies with external positions broadly in line with fundamentals:
  - Continue to address domestic imbalances to prevent excessive external imbalances.
  - Example: China should accelerate market-based structural reforms, shift fiscal policy support toward social protection to reduce high household savings and rebalance toward private consumption, and gradually increase exchange rate flexibility.
  - Example: United States should pursue fiscal consolidation over the medium term to stabilize the public debt-to-GDP ratio and maintain an external position consistent with medium-term fundamentals.
  - Economies with negative net international investment positions (example: Brazil) should raise national savings to keep current account balances in line with norms and provide room for sustainable investment expansion; productivity-boosting reforms would also improve competitiveness and facilitate green and digital transitions.

### Box 1.1 — Cross-Country Variation in Gross Capital Inflows (Emerging Markets)
- Aggregate patterns (2022–23 versus 2017–19 baseline):
  - Gross capital inflows and FDI to emerging markets declined on aggregate during 2022–23 relative to 2017–19, but with large cross-country variation.
  - Large emerging markets such as China, India, and Russia drive much of the aggregate decline.
  - Other emerging markets (examples: Malaysia, Poland, Türkiye) saw increases in gross capital inflows for both FDI and non-FDI flows relative to pre-pandemic trends.
- Geoeconomic fragmentation and bilateral FDI patterns:
  - Outward bilateral FDI flows from the euro area, Japan, and the United States show systematic differences to rival geopolitical blocs:
    - For the United States, the euro area, and Japan, FDI to the Western bloc increased relative to the 2017–19 baseline, largely driven by FDI to Europe and the United States.
    - Flows to the Eastern bloc declined or stagnated, driven by FDI into China and Russia.
    - Nonaligned destinations show mixed results: increases in Mexico for US investment, Türkiye for the euro area, and Malaysia and Vietnam for Japan.
    - For the United States and Japan, the nonaligned group outperformed the Eastern bloc.
  - A significant share of FDI flows are intermediated by financial centers (FCs), limiting the ability to allocate flows to ultimate destinations and complicating destination-based analysis.
- Measurement caution:
  - The outsized role of financial centers in intermediating capital flows calls for caution in interpreting available data on cross-country allocation of capital flows and highlights the need to improve measurement.

### Geoeconomic Fragmentation Scenarios (GIMF Model Analysis)
- Model and scenario setup:
  - Uses IMF’s Global Integrated Monetary and Fiscal (GIMF) model.
  - Trade fragmentation modeled as an increase in symmetric nontariff trade barriers (NTBs) between a hypothetical US bloc and China bloc.
  - Shock calibration: permanent 50 percent increase in NTBs over 10 years.
  - NTBs act as a negative productivity shock, reducing investment, trade volumes, and output globally, and increasing prices of imported goods (consumption, investment, intermediate goods).
- Main model findings for medium-term current accounts:
  - NTBs significantly impact medium-term current accounts, with heterogeneous effects across regions due to structural asymmetries and differing openness to trade.
  - Emerging Southeast Asia (high exposure to both blocs and specialized in global value chain goods):
    - Faces relatively larger increases in import and consumption prices, real exchange rate appreciation, temporary lowering of real interest rate, and a smaller decline in consumption (anticipation of higher future consumption prices) leading to reduced saving.
    - Reduced GVC output lowers national income, further inducing a decline in saving and causing the current account to decrease.
  - Nonaligned countries:
    - Indirect exposure through input linkages leads to small declines in investment and income.
    - Absence of NTBs makes their tradable goods relatively abundant, causing short- to medium-term real exchange rate depreciation, temporary increase in real interest rate, increased saving, and a temporary increase in the current account.
  - United States:
    - Runs a current account surplus in the scenario because it is the least exposed to the NTBs across the two blocs; prices increase relatively less than in emerging Southeast Asia, the US real exchange rate depreciates, the US real interest rate rises temporarily, and saving increases.
  - China:
    - Less exposed than emerging Southeast Asia but more exposed than countries in the US bloc, leading to a moderate current account deficit under the scenario.

*Source: CHAPTER 1 ExtErnal PosItIons and PolIcIEs (2024 External Sector Report), IMF.*

### Box 1.2. Geoeconomic Fragmentation and the Global Balance

### Box 1.2. Geoeconomic Fragmentation and the Global Balance

### Overview
- The box analyzes how geoeconomic fragmentation through trade and financial channels affects the global current-account balance (the global balance).
- The global balance is calculated as the sum of the absolute values of the current-account-to-global-GDP ratio of regions.
- Medium term is defined as model responses five years out.

### Trade Fragmentation: setup and quantitative impact
- Trade fragmentation is modeled via a 50 percent increase in NTBs (nontariff barriers).
- Key quantitative results:
  - A 50 percent increase in NTBs decreases the global balance by 0.36 percentage point of global GDP over the medium term.
  - Global medium-term real output declines by 3 percent relative to the baseline.
  - Global trade volumes decline by about 9 percent relative to the baseline.
- Regional contributions:
  - All regions contribute to narrowing the global balance except for OAE and EUR in the US bloc, since they are surplus regions where the current account increases.
  - The percentage point deviation from the baseline plotted is for the fifth period of the shock.
  - Data labels in figures use International Organization for Standardization (ISO) country code.
- Note on economic costs:
  - The narrowing of the global balance from trade restrictions comes with high economic costs due to efficiency losses and resource misallocation from reduced trade.

### Financial Fragmentation: mechanism and modeled scenario
- Financial fragmentation can reverse prior capital-market integration effects that helped lower US interest rates while raising them in surplus countries.
- Financial fragmentation is modeled as a decline in the premium paid by the China bloc on US Treasuries by 50 basis points.
- The illustrative mechanism (Metzler diagram):
  - Financial fragmentation is captured with a wedge λ and shifts lending/borrowing schedules, producing heterogeneous region responses in saving, investment, and interest rates.

### Financial Fragmentation: quantitative impact and regional responses
- Model simulation finds:
  - In the China bloc: medium-term investment increases, saving decreases, the interest rate decreases, and the current account declines.
  - In the US bloc: investment decreases, the interest rate and saving increase, and the current account increases.
  - These effects are present in all regions within both blocs; medium-term impacts on non-aligned regions are relatively minor.
- Overall medium-term impact:
  - Financial fragmentation yields a narrowing of the global balance of 0.24 percent of global GDP, with the largest contributions from China and the United States.
- Regional classification used in figures and notes:
  - US bloc includes the US, European Union and Switzerland (EUR), and other advanced economies (OAE).
  - China bloc includes China, emerging Southeast Asia (AS2), and remaining countries (ROW).
  - Latin American countries (LAT) and Indonesia and India (AS1) are not aligned.
  - EUR, OAE, CHN, AS2, and ROW have current account surpluses. USA, AS1, and LAT have current account deficits.

### Synthesis
- Fragmentation through trade and financial channels could narrow the global current account balance over the medium term.
- The magnitude of the narrowing and the countries that contribute depend on the nature of the fragmentation process:
  - Trade restrictions compress trade flows, reduce global output and trade volumes, and reduce dispersion of external balances globally.
  - Financial fragmentation produces more heterogeneous external sector responses across regions, with opposing current account moves in the China and US blocs and limited effects for non-aligned regions.

*Source: IMF staff calculations; figures and notes as provided in Box 1.2. Medium term corresponds to the fifth period of the shock.*

### Annex Table 1.1.2. External Sector Report Economies: Summary of External Assessment Indicators, 2023

### Annex Table 1.1.2. External Sector Report Economies: Summary of External Assessment Indicators, 2023

### Overall external position assessments and key indicators
- Argentina — Overall Assessment: Weaker
  - Current Account (Percent of GDP) Actual: −3.4; Cycl. Adj.: −3.6
  - IMF Staff CA Gap (Percent of GDP) Midpoint: −2.6; Range: ±1.2
  - IMF Staff REER Gap (Percent) Midpoint: 2.5; Range: ±2.5
  - International Investment Position (Percent of GDP) Net Liabilities: 175; Assets: 1681.1; CA NFA Stabilizing (Percent of GDP): 0.5
- Australia — Overall Assessment: Broadly in line
  - Current Account Actual: 1.2; Cycl. Adj.: 0.3
  - IMF Staff CA Gap Midpoint: 0.9; Range: ±0.6
  - IMF Staff REER Gap Midpoint: −5.3; Range: ±3.4
  - International Investment Position Net Liabilities: −321; Assets: 181149; CA NFA Stabilizing: −1.8; SE of CA Norm: 0.6
- Brazil — Overall Assessment: Broadly in line
  - Current Account Actual: −1.4; Cycl. Adj.: −1.7
  - IMF Staff CA Gap Midpoint: 0.2; Range: ±0.5
  - IMF Staff REER Gap Midpoint: −1.7; Range: ±4.2
  - International Investment Position Net Liabilities: −459; Assets: 147; CA NFA Stabilizing: −2.4; SE of CA Norm: 0.5
- China — Overall Assessment: Broadly in line
  - Current Account Actual: 1.4; Cycl. Adj.: 1.2
  - IMF Staff CA Gap Midpoint: −0.1; Range: ±0.6
  - IMF Staff REER Gap Midpoint: 0.7; Range: ±4.3
  - International Investment Position Net Liabilities: 173; Assets: 8541.1; CA NFA Stabilizing: 0.6
- Euro Area (11 largest economies weighted) — Overall Assessment: Broadly in line
  - Current Account Actual: 1.7; Cycl. Adj.: 1.7
  - IMF Staff CA Gap Midpoint: 0.6; Range: ±0.6
  - IMF Staff REER Gap Midpoint: −1.7; Range: ±1.7
  - International Investment Position Net Liabilities: 4239; Assets: 2430; CA NFA Stabilizing: 0.2; SE of CA Norm: 0.6
- Germany — Overall Assessment: Stronger
  - Current Account Actual: 5.9; Cycl. Adj.: 5.9
  - IMF Staff CA Gap Midpoint: 2.7; Range: ±0.5
  - IMF Staff REER Gap Midpoint: −7.5; Range: ±1.4
  - International Investment Position Net Liabilities: 7023; Assets: 23023; CA NFA Stabilizing: 3.0; SE of CA Norm: 0.5
- Japan — Overall Assessment: Broadly in line
  - Current Account Actual: 3.6; Cycl. Adj.: 3.7
  - IMF Staff CA Gap Midpoint: −0.3; Range: ±1.1
  - IMF Staff REER Gap Midpoint: 1.7; Range: ±6.3
  - International Investment Position Net Liabilities: 80168; Assets: 2483.2; CA NFA Stabilizing: 1.1
- The Netherlands — Overall Assessment: Substantially stronger
  - Current Account Actual: 10.1; Cycl. Adj.: 10.3
  - IMF Staff CA Gap Midpoint: 4.3; Range: ±0.5
  - IMF Staff REER Gap Midpoint: −6.6; Range: ±0.8
  - International Investment Position Net Liabilities: 7285; Assets: 99313.7; CA NFA Stabilizing: 0.5
- Singapore — Overall Assessment: Substantially stronger
  - Current Account Actual: 19.8; Cycl. Adj.: 20.1
  - IMF Staff CA Gap Midpoint: 7.0; Range: ±1.8
  - IMF Staff REER Gap Midpoint: −14.0; Range: ±3.6
  - International Investment Position Net Liabilities: 17195; Assets: 11122. . . (data display indicates not available/applicable)
- United States — Overall Assessment: Broadly in line
  - Current Account Actual: −3.0; Cycl. Adj.: −2.6
  - IMF Staff CA Gap Midpoint: −0.7; Range: ±0.7
  - IMF Staff REER Gap Midpoint: 5.8; Range: ±5.8
  - International Investment Position Net Liabilities: −71194; Assets: 124; CA NFA Stabilizing: −3.8; SE of CA Norm: 0.7
- Note: “. . .” indicates data are not available or not applicable. CA = current account; Cycl. Adj. = cyclically adjusted; NFA = net foreign assets; REER = real effective exchange rate; SE = standard error.

*Italicized country examples above preserve the table’s original numeric values and assessment labels.*

### IMF staff–assessed current account gaps and staff adjustments (Annex Table 1.1.3)
- Structure of table:
  - Columns: Actual CA Balance [A]; Cycl. Adj. CA Balance [B]; EBA CA Norm [C]; EBA CA Gap [D = B − C]; IMF Staff–Assessed CA Gap [E = D + F]; IMF Staff Adjustments (Other, Total [F = G − H], CA [G], Norm [H]); Comments on Adjustments.
- Selected country entries (midpoints and adjustments preserved):
  - Argentina: A = −3.4; B = −3.6; C = 0.4; D = −3.9; IMF Staff–Assessed CA GAP E = −2.6; Total staff adjustments F = 1.3; CA adjustment G = 2.4; Norm adjustment H = 1.1; Comments: Drought (CA), weak reserve coverage/external sustainability (norm).
  - Australia: A = 1.2; B = 0.3; C = −0.6; D = 0.9; IMF Staff–Assessed CA GAP E = 0.9; Total adjustments F = 0.0; Comments: (no adjustments listed).
  - China: A = 1.4; B = 1.2; C = 0.9; D = 0.3; IMF Staff–Assessed CA GAP E = −0.1; Total adjustments F = −0.4; CA adjustment G = −0.4; Comment: Travel adjustor.
  - Euro Area: A = 1.7; B = 1.7; C = 0.7; D = 1.0; IMF Staff–Assessed CA GAP E = 0.6; Total adjustments F = −0.4; Comment: Country-specific measurement bias adjustments.
  - Netherlands: A = 10.1; B = 10.3; C = 4.3; D = 6.1; IMF Staff–Assessed CA GAP E = 4.3; Total adjustments F = −1.8; Comment: Measurement biases.
  - Singapore: A = 19.8; B = 20.1; C = . . . (not applicable); IMF staff entries indicate IMF Staff–Assessed CA GAP midpoint 7.0 and adjustments including measurement biases, NFA composition, health spending.
- Aggregates:
  - Absolute sum of excess surpluses and deficits (item 5): . . . . . .1.00.9. . . . . . .
  - Discrepancy (item 6): . . . . . . . .−0.15. . . . . . .
- Note: “. . .” indicates data are not available or not applicable.

### IMF staff–assessed REER gaps and implied REER gaps (Annex Table 1.1.4)
- Table columns: IMF Staff–Assessed REER Gap (midpoint), REER Gap Implied by IMF Staff–Assessed CA Gap, EBA REER-Level Gap, EBA REER-Index Gap, CA/REER Elasticity (semielasticity), REER Percent change Average 2023/Average 2022, April 2024/Average 2023.
- Selected entries preserving exact numbers:
  - Argentina: IMF Staff–Assessed REER Gap: 22.5; REER Gap Implied by CA Gap: 21.7; EBA REER-Level Gap: 5.0; EBA REER-Index Gap: 19.9; CA/REER Elasticity: 0.1; REER Average 2023/Avg 2022: 20.5; April 2024/Avg 2023: −2.7
  - Australia: IMF Staff–Assessed REER Gap: −5.3; Implied: −5.3; EBA REER-Level Gap: 20.6; EBA REER-Index Gap: −10.6; CA/REER Elasticity: 0.17; REER 2023/2022: −0.6; April 2024/2023: 1.8
  - China: IMF Staff–Assessed REER Gap: 0.7; Implied: 0.7; EBA REER-Level Gap: 3.4; EBA REER-Index Gap: 5.1; CA/REER Elasticity: 0.14; REER 2023/2022: −8.2; April 2024/2023: −2.7
  - Japan: IMF Staff–Assessed REER Gap: 1.7; Implied: 1.7; EBA REER-Level Gap: −31.7; EBA REER-Index Gap: −35.5; CA/REER Elasticity: 0.18; REER 2023/2022: −4.9; April 2024/2023: −6.9
  - Singapore: IMF Staff–Assessed REER Gap: −14.0; Implied: −14.0; EBA fields: . . .; CA/REER Elasticity: 0.50; REER 2023/2022: 7.2; April 2024/2023: 2.0
  - United States: IMF Staff–Assessed REER Gap: 5.8; Implied: 5.8; EBA REER-Level Gap: 16.7; EBA REER-Index Gap: 8.3; CA/REER Elasticity: 0.12; REER 2023/2022: −0.5; April 2024/2023: 2.0
- Discrepancy row: 1.7 (GDP-weighted average sum of IMF staff–assessed REER gaps).
- Note: Implied REER gap = –(IMF staff–assessed CA gap/CA-to-REER elasticity). CA-to-REER semielasticity used by IMF country teams is shown in the table.

### External Balance Assessment regression policy gap contributions (Annex Table 1.1.5)
- Purpose: Decompose EBA current account gaps into policy contributions (fiscal, public health, private credit, foreign exchange intervention and capital controls) and identify domestic vs. foreign shares and residuals.
- Structure highlights:
  - Columns include EBA Gap, Fiscal Gap (Total, Identified, Domestic, Residual), Public Health Expenditure Gap, Private Credit Gap, Foreign Exchange Intervention and Capital Controls Gap, and coefficients/parameters (Coeff, P, P*, FXI P, FXI P*, KC P, KC P*).
  - Total foreign exchange intervention and capital controls contribution is constant and equal to 0.7 percent for all countries (method note).
- Selected country decompositions (total contributions and notable entries preserved):
  - Argentina — EBA Gap: −3.9
    - Fiscal total contribution: −1.8; Identified domestic: −2.5; Residual domestic: −2.1
    - Public health total: 0.0; Private credit total: −1.3
    - Foreign exchange intervention and capital controls: Total identified dom residual entries include large positive FXI/KC model coefficients (6.5 and 6.5) and negative adjustments such as −1.3 in a domestic column.
  - Australia — EBA Gap: 0.9
    - Fiscal total: 2.1; Identified dom: 1.5; Residual dom: −1.2
    - Public health total: 0.9; Private credit total: −0.3
    - FXI/KC related entries include a large coefficient entry −19.7 in a domestic column (table-preserved number).
  - China — EBA Gap: 0.3
    - Fiscal total: −0.6; Identified dom: −1.3; Residual dom: 0.9
    - Public health total: −0.2; Private credit total: −1.4; Comment: travel adjustors and measurement notes reflected in adjustments.
  - Euro Area — EBA Gap: 1.0
    - Fiscal total: 0.5; Identified dom: −0.2; Residual dom: 0.5
    - Public health total: 0.4; Private credit total: −0.8
  - Japan — EBA Gap: −0.3
    - Fiscal total: −1.5; Identified dom: −2.2; Residual dom: 1.2
    - Public health total: −0.3; Private credit total: −1.5
    - FXI/KC related aggregate coefficients include 14.1 and 7.3 entries in the FXI/KC columns per the table.
  - Netherlands — EBA Gap: 6.1
    - Fiscal total: 3.7; Identified dom: 3.1
    - FXI/KC domestic effects show very large negative entries such as −28.5 under FXI/KC coefficient columns.
- Methodological notes (from table footnotes):
  - Total contribution after adjusting for multilateral consistency.
  - Foreign contributions are estimated as fiscal = 1.2; public health = −0.1; private credit = −0.5; foreign exchange intervention = 0.0.
  - Total domestic contribution = coefficient * (P − P*).
  - Euro area EBA current account gap and policy gap contributions are GDP-weighted averages for the 11 largest euro area economies.

### 2023 Individual economy assessments: summary of policy recommendations (Annex Table 1.1.6)
- Argentina (Weaker)
  - Continue implementation of the ambitious stabilization plan centered on a strong fiscal anchor and relative price corrections.
  - Implement structural reforms to boost competitiveness and export capacity.
  - As stability and confidence return, gradually ease CFM measures conditionally; phase out remaining MCPs and exchange restrictions as early as possible.
- Australia (Broadly in line)
  - Maintain fiscal and monetary restraint.
  - Implement structural policies to boost investment: rebalance taxes from direct to indirect taxes, execute planned infrastructure investment, streamline product market regulation, and promote R&D and innovation investment.
- Belgium (Weaker)
  - Strengthen competitiveness via significant structural reforms (wage indexation, pension and social benefits, tax, labor and product markets).
  - Rebuild fiscal buffers through credible, expenditure-led consolidation while preserving public investment.
- Brazil (Broadly in line)
  - Raise national savings to allow sustainable investment expansion; continue fiscal consolidation to increase net public savings.
  - Implement structural reforms to improve efficiency and reduce the cost of doing business.
- Canada (Moderately weaker)
  - Tighter near-term fiscal policies and a medium-term fiscal consolidation plan to stabilize debt and support external rebalancing.
  - Boost services and nonfuel goods exports via improved labor productivity, removal of nontariff trade barriers, promotion of FDI, and investment in R&D, physical capital, and green transformation.
- China (Broadly in line)
  - Accelerate market-based structural reforms, open domestic markets, ensure competitive neutrality, scale back distorting industrial policies.
  - Shift fiscal support toward social protection to reduce high household savings and rebalance toward private consumption.
  - Gradually increase exchange rate flexibility.
- Euro Area (Broadly in line)
  - Improve productivity via public investment, reskilling/upskilling, encourage private investment and technology diffusion.
  - Strengthen the EU Single Market by harmonizing regulations and reducing administrative barriers; avoid trade-distorting measures.
- Germany (Stronger)
  - Promote investment and reduce excess saving, including higher fiscal deficits in the medium term to fund green transition, digitalization, and transport infrastructure.
  - Implement structural reforms to foster innovation and enhance employability of older workers.
- India (Moderately stronger)
  - Raise investment through increased public investment and incentives for private investment; liberalize investment regime; reduce import tariffs on intermediate goods; improve business climate.
- Italy (Weaker)
  - Comprehensive structural reforms to increase private investment; increase public sector saving via front-loaded fiscal adjustment and improved budget efficiency; contain social benefit spending; progressive tax reform; fully implement the National Recovery and Resilience Plan.
- Japan (Broadly in line)
  - Focus on structural reforms and fiscal sustainability via a credible medium-term fiscal consolidation plan; prioritize labor market and fiscal reforms to support private demand, raise potential growth, and promote digital and green investment.
- Korea (Moderately weaker)
  - Restrictive monetary and fiscal stance in short term; medium-term policies to encourage reduction of aging-related precautionary savings and orderly deleveraging; maintain exchange rate flexibility with limited intervention.
- Malaysia (Stronger)
  - Strengthen social safety nets and public health; encourage private investment and productivity; preserve exchange rate flexibility.
- Mexico (Moderately stronger)
  - Structural reforms to remove investment obstacles, encourage female labor force participation, promote financial deepening; maintain prudent fiscal stance; continue floating exchange rate as shock absorber; IMF Flexible Credit Line remains a buffer.
- The Netherlands (Substantially stronger)
  - Foster investment in physical and human capital; continue structural policies for energy security, housing, education, climate transition, and digitalization.
- Poland (Stronger)
  - Ease regulatory hurdles to private investments in the energy sector; strengthen pension system to reduce precautionary savings pressures.
- Russia (Broadly in line)
  - Policy recommendations: . . . (no additional detail provided in table excerpt).
- Saudi Arabia (Weaker)
  - Additional fiscal consolidation over the medium term via revenue mobilization and energy price reforms; pursue structural reforms to diversify economy and boost non-oil tradable sector.
- Singapore (Substantially stronger)
  - Execute planned major green infrastructure projects; strengthen social safety nets; implement higher public investment in health care, green and physical infrastructure, and human capital.
- South Africa (Broadly in line)
  - Bold structural reforms and ambitious fiscal consolidation; focus on energy and logistics, governance, product market efficiency, labor markets, and worker skills; maintain flexible rand as shock absorber.
- Spain (Moderately stronger)
  - Sustained fiscal consolidation to rebuild fiscal space; structural reforms and investment to boost growth; enhance education, encourage innovation, reduce energy dependence, implement Recovery, Transformation and Resilience Plan.
- Sweden (Substantially stronger)
  - When inflation recedes, increase private and public investment in green transition and health sector.
- Switzerland (Weaker)
  - Balance fiscal needs to avoid growth headwinds while creating fiscal space for aging, climate, defense; comprehensive medium-term plan required; monetary policy data-dependent; maintain commitment to free trade.
- Thailand (Stronger)
  - Promote investment, reduce precautionary savings, support domestic demand, target social transfers, infrastructure for green recovery, reform and expand social safety nets, address informality.
- Türkiye (Weaker)
  - Tighten monetary and fiscal stance; accelerate financial liberalization; enhance competition via open trade policies and remove discretionary credit allocation favoring exports; policies to improve confidence and allow accumulation of international reserves.
- United Kingdom (Weaker)
  - Gradual fiscal consolidation while preserving public services and protecting vulnerable; structural reforms to boost competitiveness and labor skills; support open trade environment and address barriers with the EU.
- United States (Broadly in line)
  - Implement medium-term fiscal consolidation; structural policies to increase competitiveness while maintaining full employment (infrastructure, education/training, support for working poor, policies to increase labor force); roll back tariff barriers and resolve trade and investment disagreements.

_Italic source attribution: Sources: IMF, International Financial Statistics; IMF, April 2024 World Economic Outlook; US Bureau of Economic Analysis; IMF staff assessments; IMF staff estimates; IMF, 2023 Individual External Balance Assessments._

### References

### ch1 - References

### Dataset, Measurement, and Data Resources
- Adler, Gustavo, Kyun Suk Chang, Rui Mano, and Yuting Shao. 2024. “Foreign Exchange Intervention: A Data Set of Official Data and Estimates.” Journal of Money Credit and Banking.
- Aizenman, Joshua, Hiro Ito, and Gurnain Kaur Pasricha. 2022. “Central Bank Swap Arrangements in the COVID-19 Crisis.” Journal of International Money and Finance 122: 102555.
- Ajello, Andrea, Michele Cavallo, Giovanni Favara, William B. Peterman, John W. Schindler IV, and Nitish R. Sinha. 2023. “A New Index to Measure U.S. Financial Conditions.” FEDS Notes, Board of Governors of the Federal Reserve System, Washington, DC.
- Bahaj, Saleem, Marie Fuchs, and Ricardo Reis. 2024. “The Global Network of Liquidity Lines.” CEPR Discussion Paper 19070, Centre for Economic Policy Research, Paris.
- Coppola, Antonio, Matteo Maggiori, Brent Neiman, and Jesse Schreger. 2021. “Redrawing the Map of Global Capital Flows: The Role of Cross-Border Financing and Tax Havens.” The Quarterly Journal of Economics 136: 1499–556.
- Damgaard, Jannick, Thomas Elkjaer, and Niels Johannesen. 2024. “What Is Real and What Is Not in the Global FDI Network?” Journal of International Money and Finance 140: 102971.
- UN World Tourism Organization. 2024. “UNWTO World Tourism Barometer and Statistical Annex, January 2024.” https://www.e-unwto.org/doi/abs/10.18111/wtobarometereng.2024.22.1.1.

### Models, Methodologies, and Simulation Tools
- Allen, Cian, Camila Casas, Giovanni Ganelli, Luciana Juvenal, Daniel Leigh, Pau Rabanal, Cyril Rebillard, and others. 2023. “2022 Update of the External Balance Assessment Methodology.” IMF Working Paper 2023/047, International Monetary Fund, Washington, DC.
- Anderson, Derek, Benjamin Hunt, Mika Kortelainen, Michael Kumhof, Douglas Laxton, Dirk Muir, Susanna Mursula, and others. 2013. “Getting to Know GIMF: The Simulation Properties of the Global Integrated Monetary and Fiscal Model.” IMF Working Paper 2013/055, International Monetary Fund, Washington, DC.
- Carton, Benjamin, and Dirk Muir. Forthcoming. “GIMF-GVC: Introducing Global Value Chains into the Global Integrated Monetary and Fiscal Model and Their Impacts.” International Monetary Fund, Washington, DC.
- Kumhof, Michael, Dirk Muir, Susanna Mursula, and Douglas Laxton. 2010. “The Global Integrated Monetary and Fiscal Model (GIMF)—Theoretical Structure.” IMF Working Paper 10/34, International Monetary Fund, Washington, DC.

### Global Imbalances, Safe Assets, and Interest Rates
- Bernanke, Ben S. 2005. “The Global Saving Glut and the US Current Account Deficit.” Speech at the Sandridge Lecture, Virginia Association of Economists, Richmond, VA, March 10.
- Caballero, Ricardo J., Emmanuel Farhi, and Pierre-Olivier Gourinchas. 2008. “An Equilibrium Model of ‘Global Imbalances’ and Low Interest Rates.” American Economic Review 98: 358–93.
- Caballero, Ricardo J., Emmanuel Farhi, and Pierre-Olivier Gourinchas. 2016. “Safe Asset Scarcity and Aggregate Demand.” American Economic Review 106: 513–18.
- Caballero, Ricardo J., Emmanuel Farhi, and Pierre-Olivier Gourinchas. 2017a. “Rents, Technical Change, and Risk Premia Accounting for Secular Trends in Interest Rates, Returns on Capital, Earning Yields, and Factor Shares.” American Economic Review 107: 614–20.
- Caballero, Ricardo J., Emmanuel Farhi, and Pierre-Olivier Gourinchas. 2017b. “The Safe Assets Shortage Conundrum.” Journal of Economic Perspectives 31: 29–46.
- Caballero, Ricardo J., Emmanuel Farhi, and Pierre-Olivier Gourinchas. 2021. “Global Imbalances and Policy Wars at the Zero Lower Bound.” Review of Economic Studies 88: 2570–621.
- Obstfeld, Maurice. 2017. “Assessing Global Imbalances: The Nuts and Bolts.” IMF Blog, June 26. https://www.imf.org/en/Blogs/Articles/2017/06/26/assessing-global-imbalances-the-nuts-and-bolts.

### Capital Flows, External Positions, and International Finance
- Gelos, Gaston, Lucyna Gornicka, Robin Koepke, Ratna Sahay, and Silvia Sgherri. 2022. “Capital Flows at Risk: Taming the Ebbs and Flows.” Journal of International Economics 134: 103555.
- Goldberg, Linda S., and Fabiola Ravazzolo. 2022. “The Fed’s International Dollar Liquidity Facilities: New Evidence on Effects.” NBER Working Paper 29982, National Bureau of Economic Research, Cambridge, MA.
- Goldberg, Linda S., and Signe Krogstrup. 2023. “International Capital Flow Pressures and Global Factors.” Journal of International Economics 146: 103749.
- Coppola, Antonio, Matteo Maggiori, Brent Neiman, and Jesse Schreger. 2021. “Redrawing the Map of Global Capital Flows: The Role of Cross-Border Financing and Tax Havens.” The Quarterly Journal of Economics 136: 1499–556.
- Lane, Philip R., and Gian Maria Milesi-Ferretti. 2018. “The External Wealth of Nations Revisited: International Financial Integration in the Aftermath of the Global Financial Crisis.” IMF Economic Review 66: 189–222.
- Perks, Michael, Yudong Rao, Jongsoon Shin, and Kiichi Tokuoka. 2021. “Evolution of Bilateral Swap Lines.” IMF Working Paper 2021/210, International Monetary Fund, Washington, DC.
- Goldberg, Linda S., and Signe Krogstrup. 2023. “International Capital Flow Pressures and Global Factors.” Journal of International Economics 146: 103749.

### Policy Frameworks, Reserve Adequacy, and the Global Financial Safety Net
- Aiyar, Shekhar, Jiaqian Chen, Christian Ebeke, Roberto Garcia-Saltos, Tryggvi Gudmundsson, Anna Ilyina, and others. 2023. “Geoeconomic Fragmentation and the Future of Multilateralism.” IMF Staff Discussion Note 2023/001, International Monetary Fund, Washington, DC.
- Denbee, Edward, Carsten Jung, and Francesco Paternò. 2016. “Stitching Together the Global Financial Safety Net.” Financial Stability Paper 36, Bank of England, London.
- Gelos, Gaston, Lucyna Gornicka, Robin Koepke, Ratna Sahay, and Silvia Sgherri. 2022. “Capital Flows at Risk: Taming the Ebbs and Flows.” Journal of International Economics 134: 103555.
- International Monetary Fund (IMF). 2015. “Assessing Reserve Adequacy—Specific Proposals.” IMF Policy Paper, International Monetary Fund, Washington, DC.
- International Monetary Fund (IMF). 2023. “Integrated Policy Framework—Principles for the Use of Foreign Exchange Intervention.” IMF Policy Paper 2023/061, International Monetary Fund, Washington, DC.
- Goldberg, Linda S., and Fabiola Ravazzolo. 2022. “The Fed’s International Dollar Liquidity Facilities: New Evidence on Effects.” NBER Working Paper 29982, National Bureau of Economic Research, Cambridge, MA.
- Bahaj, Saleem, Marie Fuchs, and Ricardo Reis. 2024. “The Global Network of Liquidity Lines.” CEPR Discussion Paper 19070, Centre for Economic Policy Research, Paris.

### Historical and Conceptual Foundations
- Metzler, Lloyd A. 1968. “The Process of International Adjustment under Conditions of Full Employment: A Keynesian View.” In Readings in International Economics, edited by Richard E. Caves and Harry G. Johnson. Homewood, IL: American Economic Association.
- Bernanke, Ben S. 2005. “The Global Saving Glut and the US Current Account Deficit.” Speech at the Sandridge Lecture, Virginia Association of Economists, Richmond, VA, March 10.
- Hale, Galina, Bart Hobijn, Fernanda Nechio, and Doris Wilson. 2019. “How Much Do We Spend on Imports?” FRBSF Economic Letter 2019-01, Federal Reserve Bank of San Francisco, San Francisco, CA.

*Source: ch1 - References*

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_Source: https://www.imf.org/-/media/files/publications/esr/2024/english/ch1.pdf_