## SUPPLEMENT TO THE GUIDANCE NOTE FOR SURVEILLANCE UNDER ARTICLE IV CONSULTATIONS

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**Canonical URL:** [SUPPLEMENT TO THE GUIDANCE NOTE FOR SURVEILLANCE UNDER ARTICLE IV CONSULTATIONS](https://www.imf.org/-/media/files/publications/pp/2021/english/ppea2021004.pdf)

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### Overview
- Document: Supplement to the Guidance Note for Surveillance Under Article IV Consultations (Effective January 25, 2021).
- Purpose: Provide updated guidance to country teams on bilateral surveillance in the context of Article IV consultations in light of the COVID crisis, while keeping intact the substance of all existing Board-endorsed requirements.
- Scope: Modifies aspects of the comprehensive 2015 Guidance Note for Surveillance Under Article IV Consultations only as specified; otherwise the 2015 Guidance Note remains in effect.
- Duration: This supplement "will remain in effect, in the absence of further communication, until comprehensive new guidance is issued following the completion of the upcoming Comprehensive Surveillance Review."
- Administrative: The staff report was prepared by IMF staff and completed on January 11, 2021; it was issued to the Executive Board for information.

### Implementation of past Article IV recommendations
- Rationale: "Given the size of the COVID-19 shock, past policy advice may no longer be relevant in many cases," and comprehensive reviews may be difficult while authorities and staff face significant time and resource pressures.
- Guidance:
  - Staff may opt to provide a focused follow-up on past Article IV recommendations.
  - Focused follow-up should cover only those areas that are critical for the crisis and recovery.
  - Presentation formats are flexible: within the main text of policy discussions, a table, or an Annex.

### Follow-up on previous FSAP recommendations
- Rationale: Conducting comprehensive review of implementation may be difficult during the crisis; significant delays in implementation of some measures can be expected.
- Guidance:
  - Staff may opt to provide a focused follow-up on previous FSAP recommendations.
  - Focused follow-up should cover only those areas that are critical for the crisis and recovery.
  - Presentation formats are flexible: within the main text of policy discussions, a table, or an Annex.

### External Debt Sustainability Assessment (DSA) for Market Access Countries (MAC)
- Current practice: Important elements of the assessment of external sustainability for MAC countries are already expected to be covered in the External Sector Assessment (ESA).
- Guidance:
  - Public sector debt sustainability assessments will continue to be required in all cases.
  - "A discontinuation of the separate external DSA for MACs would allow for a more focused discussion of relevant issues."
  - If additional discussion on external debt is necessary beyond what is covered by the ESA, teams can include it in the write-up of the public DSA.
  - Decision: "MAC external DSAs will no longer be required."

### External Sector Assessment
- Coverage: "The expected coverage of the external sector assessment remains unchanged."
- COVID focus: Country teams should place focus on areas particularly relevant in the context of the COVID pandemic.
- Presentation flexibility:
  - Country teams have flexibility on presentation in Staff Reports (for example, an Annex, a Box, or part of the main text), provided the discussion meets the needed coverage.
  - ESR countries: "should continue to present their external sector assessments using the standardized ESR template."
  - Non-ESR countries: use of the ESR template for EBA countries or the more flexible non-ESR template for all other members remains optional; country teams can decide the most appropriate presentation.

### Informational Annex — Streamlining specific elements
- General: The following elements usually found in the Informational Annex can be further streamlined.

- Capacity Development:
  - A list of recent capacity development activities is not required.
  - Where germane to issues covered in the staff report, country teams are encouraged to reference CD priorities in the body of the staff report to better integrate CD and surveillance.
  - Heavy users of CD who have produced a CD country strategy note (CD-CSN) are encouraged to reflect a summary of their CD-CSN in the body or annex of the staff report.

- Relations with other IFIs:
  - Country teams can streamline content to focus more selectively.
  - Option to provide in the annex hyperlinks to the country pages of relevant IFIs on their own external websites.

- Data issues:
  - There is no expectation for country teams to report on the main websites for data.
  - The requirement to report on statistical issues, including the assessment of data adequacy for surveillance, remains in effect.

*Supplement to the Guidance Note for Surveillance Under Article IV Consultations (Effective January 25, 2021). IMF staff report, completed on January 11, 2021.*

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_Source: https://www.imf.org/-/media/files/publications/pp/2021/english/ppea2021004.pdf_