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### Current Conjuncture
- Global economy is expanding moderately but the outlook has weakened further since October, and risks have increased.
- Recent positives: some improvement in data releases, somewhat firmer oil prices, reduced pressures on outflows from China, and actions by major central banks have contributed to improving sentiment.
- Major assessments:
  - Recovery in advanced economies is moderate. Growth in the United States is flat, owing in part to a strong dollar. Low investment, high unemployment, weak balance sheets, and subdued demand from emerging markets weigh on growth in some euro area countries. In Japan, growth and inflation are weaker than expected, reflecting in particular a sharp fall in private consumption.
  - Emerging and developing economies are slowing further. Deep recessions in Brazil and Russia, modest recoveries in advanced economies, exposure to China’s rebalancing, and tightening financial conditions are contributing. China’s ongoing transitions will continue to slow growth, particularly in manufacturing, but make it more sustainable. India and the ASEAN-5 (Indonesia, Malaysia, Philippines, Thailand, and Vietnam) are highlighted as stronger performers; Mexico and Turkey grow at a moderate pace.
  - Commodity exporters face difficult adjustment; commodity importers have seen less positive impact from lower commodity prices than expected.
  - Terms of trade developments have led to a narrowing of global imbalances, even as net creditor and debtor positions continue to expand.
- Financial stability risks have increased: market volatility, risk aversion, tightening financial conditions, rising vulnerabilities in EMs, persistent AE legacies (nonperforming loans), and weak systemic market liquidity.
- Structural headwinds and risks: persistently high unemployment, high debt, low investment, long-term decline in productivity growth, historic lows in public investment in advanced economies, sizable infrastructure gaps in EMs and developing countries, slower trade growth, and shocks from geopolitical conflicts, terrorism, refugee flows, a potential U.K. exit from the European Union, and global epidemics.

### Policy Challenges and Priorities
- Overall prescription: boost commitment to growth with a three-pronged approach using monetary, fiscal, and structural actions that are mutually reinforcing.
- Monetary policy:
  - Advanced economies: stance remains appropriately accommodative and needs to continue where output gaps are negative and inflation is too low (Annex I).
  - Unconventional monetary policies support demand; very low or negative interest rates may affect bank profitability.
  - Emerging economies: manage weaker currencies’ effects on inflation and private sector balance sheets; use exchange rate flexibility where feasible.
- Fiscal policy:
  - Strong case for domestic coordination; fiscal policy needs to do more in some cases.
  - Countries with fiscal space should ease fiscal policy further to support domestic and global demand; Canada’s recent budget is cited as an example.
  - All countries should aim for more growth-friendly composition of revenue and expenditure, especially increased infrastructure spending in some countries.
- Structural reforms:
  - Delivery must be accelerated; reforms improve productivity and potential output.
  - Exploit synergies between demand-supportive fiscal policy and structural reforms.
  - Examples with built-in fiscal stimulus: reducing the labor tax wedge, increasing spending in R&D, and active labor market policies.
  - Sequence priorities according to development stage and institutional strength; commodity exporters and low income developing countries should pursue diversification and structural transformation.
- Financial sector:
  - Prevent de-risking from unduly impeding access to financial services, including correspondent banking relationships.
  - Speed up repair of private sector balance sheets to avoid protracted deleveraging and weakened credit channels.
  - Complete the EU Banking Union by putting in place a common deposit guarantee scheme and reduce risks in banking systems.
  - Continue global regulatory reform implementation, transform shadow banking into stable market-based finance, and enhance market liquidity resilience.
- Global cooperation:
  - Commit to policy actions that contribute to a global package to lift national and global growth.
  - Cooperation needs include: enhancing mechanisms for adjustment and liquidity provision, shoring up global trade, tackling corruption, and furthering the regulatory reform agenda.

### How the Fund Will Help the Membership
- Surveillance: focus on candid policy advice, identifying where countries have space to do more, and responding to new member challenges.
- Capacity development: target priority reforms identified through surveillance.
- Financial resources: provide a strong financial backstop to underpin more forceful policy implementation while preserving financial stability and protecting the vulnerable.
- Emphasize importance of adequate resourcing for the Fund to fulfill its tasks.

### Clarifying the Contours of Available Policy Space
- Rebalance the policy mix:
  - Fund will more proactively identify policy space and necessary measures, including analyzing implications of easing the zero lower bound constraint on policy rates.
  - Promote a concerted approach, identifying cases where fiscal policy can play a bigger role in supporting demand and augmenting structural reforms.
  - Deepen analysis of structural reforms’ impact on growth, employment, and macro stability and on principles to guide prioritization.
  - Review members’ experiences and policies in dealing with capital flow pressures.
- Facilitate efficient infrastructure spending:
  - Pilot a new infrastructure policy support initiative to identify macro and financial implications of scaling up infrastructure and to assess and improve institutional capacity.
- Support healthier private sector balance sheets:
  - Assess the size and implications of the problem and examine options to reduce adverse balance sheet effects from rising private sector indebtedness and unresolved bank crisis legacies.
  - Promote longer-term equity finance (e.g., removing the tax bias in favor of debt financing) and use macroprudential policies to avoid dangerous increases in leverage.
  - Help facilitate adoption of financial regulatory reforms in member countries.

### Providing Financial Support
- Strengthen global financial safety net:
  - Explore reforms, including strengthening coordination with Regional Financial Arrangements and revisiting the Fund’s lending toolkit.
  - Examine broader use of the SDR.
- Backstop good policy implementation:
  - Provide tailored policy support and consider enhancing financial support to assist diversification and adjustment in countries hit by commodity price decline, many of which are low income countries, and countries critically affected by El Niño.
  - Quick, predictable, and reliable liquidity support could ring fence eligible members hit by liquidity shocks and limit contagion.
- Manage spillovers from non-economic sources:
  - A coordinated global initiative—multilateral agencies including the Fund and those at risk contributing resources—could support countries at the center of epidemics or refugee crises.
  - Reassess how resources can be channeled to areas of greatest need.
- Tailor support for low income countries:
  - Continue assistance by integrating post-2015 development agenda deliverables and addressing issues facing fragile states.
  - Initiative underway to assess how the Fund can best support growth and resilience in small states affected by natural disasters.
  - Examine the scope for precautionary financial support and blending GRA with PRGT resources.

### Continuing to Address New Challenges
- De-risking:
  - Collaborate with international institutions to solidify a view on drivers, magnitude, and impact of de-risking.
  - Support affected countries through policy advice, standards assessments, tailored capacity development (including on AML/CFT), and promote dialogue among authorities, standards setters, and the private sector.
- Strengthen policy advice on emerging issues:
  - Build expertise on macro-critical issues within the Fund’s mandate.
  - Examine migration impacts on growth, labor markets, and fiscal positions in recipient and sender countries.
  - Assess how redistributive fiscal policies affect domestic demand, potential growth, and income inequality; cover inequality and gender issues in more country surveillance reports, with countries’ consent.
  - Continue analysis of macroeconomic and financial stability impacts of climate change and assist countries in devising appropriate policies and instruments.
  - Examine factors impacting medium- and long-term growth: demographic shifts, gender, governance (particularly corruption), and technology.
  - Apply new principles for evenhanded surveillance and use reporting and assessment mechanisms to assess concerns and identify lessons.

### Integrate Capacity Development into the Policy Mix
- Provide technical assistance and training to complement policy analysis and strengthen monitoring of results.
- Focus on assisting low income countries in international tax issues and, with the World Bank, boost domestic resource mobilization efforts.
- Strengthen institutions to tackle illicit flows and work to close data gaps to support enhanced policy analysis.
- Strengthen knowledge management and make high-quality, web-based information on critical topics available.

### Keeping the Fund Strong
- Ensuring adequate resources:
  - Entry into force of the 14th General Review of Quotas and the Board Reform Amendment are cited as crucial steps.
  - Fund will work expeditiously toward completion of the 15th General Review of Quotas, including a new quota formula, by the 2017 Annual Meetings.
  - Pending the outcome of the 15th Review, the Fund’s current overall lending capacity should be maintained.
  - Providing agile, integrated, and member-focused support will require adequate financial, human, and technological resources, more diverse staffing, and gender diversity in the Executive Board.

### Annex I — Implementation Highlights (high-level)
- Advanced Economies — Spring 2015 GPA priorities and assessment highlights:
  - Fiscal policy: More supportive fiscal policy where conditions allow; some credible medium-term budget plans in some countries; more fiscal support needed in some countries and credible medium-term consolidation plans still missing in most countries.
  - Monetary policy: Accommodative monetary policy in the euro area and Japan; clear communication by major central banks. Expansion of asset purchase program in the euro area and introduction of negative interest rates in Japan.
  - Financial sector policies: Strengthening regulation and supervision of activities outside banking; continued implementation of global regulatory reform agenda; ongoing efforts to reduce non-performing loans and limited progress in harmonizing insolvency rules in the euro area.
  - Structural reforms: Lower tax wedges, targeted labor market policies, immigration reforms, removal of labor market barriers, and better incentives for innovation.

### Annex II — Key IMF Activities since the Annual Meetings
- Agile actions:
  - Financing provided to countries affected by lower commodity prices and natural disasters. New disbursements under the Rapid Credit Facility were approved for Central African Republic, Dominica, and Madagascar, and a new Standby Credit Facility arrangement for Mozambique.
  - Broadened knowledge on migration, de-risking, and the global trade slowdown; analytical papers including a Staff Discussion Note on the economic implications of the refugee surge in Europe and work on de-risking and trade slowdown factors.
  - Ongoing deeper analyses on structural reforms, including a WEO chapter and a structural reforms prioritization toolkit.
  - Assessing adequacy of the global financial safety net and size of the Fund to support forward-looking dialogue on the international monetary system and the IMF.
  - Implemented a structured approach for capacity development activities in fragile states with training, follow-up, and results-based monitoring.
- Integrated efforts:
  - Integrated approach to assessing transition spillovers from China rebalancing and low commodity prices.
  - Macrofinancial pilots commenced in 67 country staff reports; published a macrostructural report identifying structural reform areas with macroeconomic implications.
  - Second phase of the G20 Data Gaps Initiative began in January 2016.
  - Piloted analyses on climate change, gender, and inequality where macro-relevant.
  - Developed a new tool to monitor disorderly market conditions and a conceptual approach to assess unconventional monetary and FX intervention policies.
  - Strengthened synergies between surveillance and capacity development in revenue mobilization, GFS standards, data-gathering, inclusive growth, energy subsidy reform, social safety nets, and Islamic finance; advanced training curriculum review.
- Member-focused actions:
  - Board approved expansion of the SDR basket to include the renminbi; staff working with SDR users and Chinese authorities to facilitate a smooth transition to the new SDR basket in October 2016.
  - Implemented the 2010 quota and governance reform.
  - Continued engagement with fora including the G20 and ASEAN, peer-to-peer events (CCA, MENA, SSA) and high-level seminars (Argentina, Brazil, Canada, Cuba, Ghana, Venezuela).
  - Published a paper clarifying principles of evenhandedness of Fund analysis and advice in surveillance and sketched a mechanism for reporting and assessing specific concerns by country authorities.
  - Scaled up technical assistance and training in low income countries, particularly in domestic revenue mobilization and international taxation; reached out to development partners to scale up capacity development for the Financing for Development agenda.
  - Expanded online learning: two new online courses (Financial Programming and Policies Part 2 and Macroeconomic Forecasting) were delivered; Spanish and Russian versions of Financial Programming and Policies course launched.

### Annex III — Implementation of IMF Deliverables (November 2015–April 2016)
- Lending, Debt Sustainability, and Restructuring — Agile deliverables:
  - Crisis Program Review
  - Strengthening the Post-Program Monitoring Framework
  - Reforming the Policy on Non-Toleration of Arrears to Official Creditors
  - The Fund’s Lending Framework and Sovereign Debt
  - Public Debt Vulnerabilities in LICs
- Surveillance — Integrated deliverables:
  - Fiscal: Institutional frameworks; Enhancing policy efficiency; Domestic revenue mobilization, including international taxation
  - Monetary, Macroprudential, and Exchange Rates: Policy frameworks; External balances and exchange rates; Reserve adequacy; Macroprudential policies; Capital flow management
  - Financial Sector Policies: Global regulatory reforms; Macrofinancial analysis; Financial stability; Managing Systemic Risk; Assessing de-risking pullbacks from international banks; Financial development and inclusion; Islamic Finance; Data gaps
  - Structural Reforms and Emerging Issues: Reforms and upgrade of economic structures; Revitalizing trade; Benefits of financial integration; Implications of climate change; Demographic transitions, migration, and refugees; Inclusion and equity
  - Multilateral Cooperation — Member Oriented: Fund governance and resources; Strengthening the International Monetary System; Standards and Codes
  - General Operations: Evenhandedness; Implementation of the IMF Communications Strategy
- Note: IMF deliverables identified in the Fall 2015 Global Policy Agenda and Work Program. The color coding of the assessment is as follows: Completed Ongoing Delayed

*Source: The Managing Director’s Spring Global Policy Agenda: Decisive Action, Durable Growth (April 2016).*

### Section 1

### _041416 - Section 1

### Current Conjuncture
- The global economy is expanding moderately but the outlook has weakened further since October, and risks have increased.
- Recent positives: some improvement in data releases, somewhat firmer oil prices, reduced pressures on outflows from China, and actions by major central banks have contributed to improving sentiment.
- Major assessments:
  - The recovery in advanced economies is moderate. Growth in the United States is flat, owing in part to a strong dollar. Low investment, high unemployment, weak balance sheets, and subdued demand from emerging markets weigh on growth in some euro area countries. In Japan, growth and inflation are weaker than expected, reflecting in particular a sharp fall in private consumption.
  - Emerging and developing economies are slowing further. Deep recessions in Brazil and Russia, modest recoveries in advanced economies, exposure to China’s rebalancing, and tightening financial conditions are contributing. China’s ongoing transitions will continue to slow growth, particularly in manufacturing, but make it more sustainable. India and the ASEAN-5 (Indonesia, Malaysia, Philippines, Thailand, and Vietnam) are highlighted as stronger performers; Mexico and Turkey grow at a moderate pace.
  - Commodity exporters face difficult adjustment; commodity importers have seen less positive impact from lower commodity prices than expected.
  - Terms of trade developments have led to a narrowing of global imbalances, even as net creditor and debtor positions continue to expand.
- Financial stability risks have increased: market volatility, risk aversion, tightening financial conditions, rising vulnerabilities in EMs, persistent AE legacies (nonperforming loans), and weak systemic market liquidity.
- Structural headwinds and risks: persistently high unemployment, high debt, low investment, long-term decline in productivity growth, historic lows in public investment in advanced economies, sizable infrastructure gaps in EMs and developing countries, slower trade growth, and shocks from geopolitical conflicts, terrorism, refugee flows, a potential U.K. exit from the European Union, and global epidemics.

### Policy Challenges and Priorities
- Overall prescription: countries should boost commitment to growth with a three-pronged approach using monetary, fiscal, and structural actions that are mutually reinforcing.
- Monetary policy:
  - In advanced economies, monetary policy stance remains appropriately accommodative and needs to continue where output gaps are negative and inflation is too low (Annex I).
  - Unconventional monetary policies are supporting demand, though very low or negative interest rates may affect bank profitability.
  - In emerging economies, monetary policy must manage weaker currencies’ effects on inflation and private sector balance sheets; exchange rate flexibility should be used where feasible.
- Fiscal policy:
  - There is a strong case for domestic coordination; fiscal policy needs to do more in some cases.
  - Countries with fiscal space should ease fiscal policy further to support domestic and global demand; Canada’s recent budget is cited as an example.
  - All countries should aim for more growth-friendly composition of revenue and expenditure, especially increased infrastructure spending in some countries.
- Structural reforms:
  - Delivery must be accelerated; reforms improve productivity and potential output.
  - Synergies between demand-supportive fiscal policy and structural reforms should be exploited.
  - Examples of reforms with built-in fiscal stimulus: reducing the labor tax wedge, increasing spending in R&D, and active labor market policies.
  - Priorities should be sequenced according to development stage and institutional strength; commodity exporters and low income developing countries should pursue diversification and structural transformation.
- Financial sector:
  - Prevent de-risking from unduly impeding access to financial services, including correspondent banking relationships.
  - Speed up repair of private sector balance sheets to avoid protracted deleveraging and weakened credit channels.
  - Complete the EU Banking Union by putting in place a common deposit guarantee scheme and reduce risks in banking systems.
  - Continue global regulatory reform implementation, transform shadow banking into stable market-based finance, and enhance market liquidity resilience.
- Global cooperation:
  - Countries should commit to policy actions that contribute to a global package to lift national and global growth.
  - Examples of cooperation needs: enhancing mechanisms for adjustment and liquidity provision, shoring up global trade, tackling corruption, and furthering the regulatory reform agenda.

### How the Fund will Help the Membership
- Surveillance: focus on candid policy advice, identifying where countries have space to do more, and responding to new member challenges.
- Capacity development: target priority reforms identified through surveillance.
- Financial resources: provide a strong financial backstop to underpin more forceful policy implementation while preserving financial stability and protecting the vulnerable.
- Importance of adequate resourcing for the Fund to fulfill its tasks.

### Clarifying the Contours of Available Policy Space
- Push to rebalance the policy mix:
  - The Fund will more proactively identify policy space and necessary measures, including analyzing implications of easing the zero lower bound constraint on policy rates.
  - The Fund will promote a concerted approach, identifying cases where fiscal policy can play a bigger role in supporting demand and augmenting structural reforms.
  - Continue deepening analysis of structural reforms’ impact on growth, employment, and macro stability and on principles to guide prioritization.
  - Review members’ experiences and policies in dealing with capital flow pressures.
- Facilitate efficient infrastructure spending:
  - A new infrastructure policy support initiative will be piloted to identify macro and financial implications of approaches to scaling up infrastructure and to assess and improve institutional capacity.
- Support healthier private sector balance sheets:
  - The Fund will assess the size and implications of the problem and examine options to reduce adverse balance sheet effects from rising private sector indebtedness and unresolved bank crisis legacies.
  - Work will focus on promoting longer-term equity finance (e.g., removing the tax bias in favor of debt financing) and use of macroprudential policies to avoid dangerous increases in leverage.
  - The Fund will help facilitate adoption of financial regulatory reforms in member countries.

### Providing Financial Support
- Contribute to a strong and coherent global financial safety net:
  - The Fund will explore reforms, including strengthening coordination with Regional Financial Arrangements and revisiting its lending toolkit.
  - The Fund will examine broader use of the SDR.
- Backstop good policy implementation:
  - The Fund will provide tailored policy support and consider enhancing financial support to assist diversification and adjustment in countries hit by commodity price decline, many of which are low income countries, and countries critically affected by El Niño.
  - Quick, predictable, and reliable liquidity support could ring fence eligible members hit by liquidity shocks and limit contagion.
- Assist in managing spillovers from non-economic sources:
  - A coordinated global initiative to provide financial support—multilateral agencies including the Fund and those at risk contributing resources—could support countries at the center of epidemics or refugee crises.
  - The Fund will reassess how resources can be channeled to areas of greatest need.
- Tailor support for low income countries:
  - Continue assistance by integrating post-2015 development agenda deliverables and addressing issues facing fragile states.
  - An initiative is underway to assess how the Fund can best support growth and resilience in small states affected by natural disasters.
  - The Fund will examine the scope for precautionary financial support and blending GRA with PRGT resources.

### Continuing to Address New Challenges
- De-risking:
  - The Fund will collaborate with international institutions to solidify a view on drivers, magnitude, and impact of de-risking.
  - Support affected countries through policy advice, standards assessments, tailored capacity development (including on AML/CFT), and promote dialogue among authorities, standards setters, and the private sector.
- Strengthen policy advice on emerging issues:
  - Build expertise on macro-critical issues within the Fund’s mandate.
  - Examine migration impacts on growth, labor markets, and fiscal positions in recipient and sender countries.
  - Assess how redistributive fiscal policies affect domestic demand, potential growth, and income inequality; cover inequality and gender issues in more country surveillance reports, with countries’ consent.
  - Continue analysis of macroeconomic and financial stability impacts of climate change and assist countries in devising appropriate policies and instruments.
  - Examine factors impacting medium- and long-term growth: demographic shifts, gender, governance (particularly corruption), and technology.
  - Apply the new principles for evenhanded surveillance and use reporting and assessment mechanisms to assess concerns and identify lessons.

### Integrate Capacity Development into the Policy Mix
- Provide technical assistance and training to complement policy analysis and strengthen monitoring of results.
- Focus on assisting low income countries in international tax issues and, with the World Bank, boost domestic resource mobilization efforts.
- Strengthen institutions to tackle illicit flows and work to close data gaps to support enhanced policy analysis.
- Strengthen knowledge management and make high-quality, web-based information on critical topics available.

### Keeping the Fund Strong
- Ensuring adequate resources:
  - The entry into force of the 14th General Review of Quotas and the Board Reform Amendment are cited as crucial steps.
  - The Fund will work expeditiously toward completion of the 15th General Review of Quotas, including a new quota formula, by the 2017 Annual Meetings.
  - Pending the outcome of the 15th Review, the Fund’s current overall lending capacity should be maintained.
  - Providing agile, integrated, and member-focused support will require adequate financial, human, and technological resources, more diverse staffing, and gender diversity in the Executive Board.

### Annex I. Implementation of Policy Priorities by the Membership (high-level)
- Advanced Economies — Spring 2015 GPA Policy Priorities and assessment highlights:
  - Fiscal policy: More supportive fiscal policy where conditions allow. Some credible medium-term budget plans in some countries; more fiscal support needed in some countries and credible medium-term consolidation plans still missing in most countries.
  - Monetary policy: Accommodative monetary policy in the euro area and Japan; clear communication by major central banks. Expansion of asset purchase program in the euro area and introduction of negative interest rates in Japan.
  - Financial sector policies: Strengthening regulation and supervision of activities outside banking; continued implementation of global regulatory reform agenda; ongoing efforts to reduce non-performing loans and limited progress in harmonizing insolvency rules in the euro area.
  - Structural reforms: Lower tax wedges, targeted labor market policies, immigration reforms, removal of labor market barriers, and better incentives for innovation.

*Source: The Managing Director’s Spring Global Policy Agenda: Decisive Action, Durable Growth (April 2016).*

### Section 2

### _041416 - Section 2

### Infrastructure, product and labor market reforms — overview
- Infrastructure investments. Removal of product market barriers.
- Uneven progress in undertaking labor market reforms, providing better incentives for innovation and removing product market barriers. Limited progress in delivering infrastructure investments.

### Emerging Market Economies — policy areas and implementation assessment
Fiscal policy
- Policy guidance: Demand support in countries with policy flexibility, including to smooth adjustment to lower commodity prices. Growth-friendly fiscal rebalancing, including tax reforms, energy prices reforms and expenditure prioritization, in other countries. Clear and effective communication about policy stance in China.
- Implementation assessment: Use of fiscal buffers to smooth spending in some commodity exporters. Uneven progress in using policy space to support demand in other countries. More progress needed on growth-friendly fiscal rebalancing in most countries.

Monetary policy
- Policy guidance: Demand support in countries with policy flexibility, including to smooth adjustment to lower commodity prices. Exchange rate flexibility to serve as shock absorber. Temporary role for capital flow management measures on outflows as part of a broad policy response to crises. Clear and effective communication about policy stance in China.
- Implementation assessment: Further monetary easing in some oil-importing countries. Exchange rates allowed to serve as shock absorbers in several countries. New capital flow management measures in only a few countries. Active communication about policy stance in China.

Financial sector policies
- Policy guidance: Solid policy frameworks, including ensuring adequate provisioning of bad loans, flexible insolvency procedures and avoiding market dysfunction. Swift implementation of the global regulatory reform agenda. Upgrading the policymaking framework, broader financial sector reforms and a more market-based financial system in China.
- Implementation assessment: Ongoing efforts in strengthening financial supervisory and regulatory frameworks. Sustained implementation of the global regulatory reform agenda. Continued financial sector reforms, including the liberalization of deposit rates, in China.

Structural reforms
- Policy guidance: Energy infrastructure investments, improved business conditions, education, labor and product market reforms, economic diversification in commodity exporters, fiscal, social security and state-owned enterprise reforms in China.
- Implementation assessment: Some steps taken to address energy infrastructure bottlenecks. Limited and uneven progress in improving business conditions as well as implementing labor and product market reforms. More progress needed in undertaking education reforms and promoting economic diversification. Some progress on fiscal, social security and state-owned enterprise reforms in China.

### Low Income Developing Countries — policy areas and implementation assessment
Fiscal policy
- Policy guidance: Demand support in countries with policy flexibility, including to smooth adjustment to lower commodity prices. Growth-friendly fiscal rebalancing, including tax reforms, energy price reforms and expenditure prioritization, in other countries.
- Implementation assessment: Limited fiscal space to support demand in most countries. Ongoing efforts in growth-friendly fiscal rebalancing, including through tax reforms and expenditure prioritization.

Monetary policy
- Policy guidance: Demand support in countries with policy flexibility, including to smooth adjustment to lower commodity prices. Exchange rate flexibility to serve as a shock absorber. Temporary role for capital flow management measures on outflows as part of a broad policy response to crises.
- Implementation assessment: Limited policy flexibility to support demand in most countries. Exchange rates allowed to adjust in some countries. Uneven progress in the use of capital flow management measures.

Financial sector policies
- Policy guidance: Solid policy frameworks, including ensuring adequate provisioning of bad loans, flexible insolvency procedures and avoiding market dysfunction. Swift implementation of the global regulatory reform agenda.
- Implementation assessment: Ongoing efforts in strengthening financial supervisory and regulatory frameworks, suited to the national context. Continued, albeit uneven, implementation of the global regulatory reform agenda.

Structural reforms
- Policy guidance: Energy infrastructure investments, improved business conditions, education, labor and product market reforms, economic diversification in commodity exporters.
- Implementation assessment: Ongoing efforts in improving business conditions. Uneven progress in addressing energy infrastructure bottlenecks, implementing education and labor market reforms, and promoting economic diversification. Limited progress in undertaking product market reforms.

Note: Policy priorities in the first column are drawn from the Fall 2015 Global Policy Agenda. The assessment reflects progress in implementation since then. Income groups are aggregated using PPP GDP weights. The color coding of the assessment of implementation is as follows:

### Annex II. Key IMF Activities since the Annual Meetings
- Over the last six months, the Fund has supported its membership with new AIM by becoming more agile, integrative and member-focused.

Agile
- The IMF provided financing to countries affected by lower commodity prices and natural disasters. New disbursements under the Rapid Credit Facility were approved for Central African Republic, Dominica, and Madagascar, and a new Standby Credit Facility arrangement for Mozambique.
- Knowledge on emerging issues, such as migration, de-risking, and the global trade slowdown, has been broadened. A number of analytical papers were completed or are underway, including a Staff Discussion Note on the economic implications of the refugee surge in Europe, the extent, scope, and impact of de-risking, and factors behind the global trade slowdown as well as proposals to reinvigorate global trade integration.
- Deeper analyses on structural reforms are ongoing, including a WEO chapter highlighting the complementarity between structural reforms and demand-side policies and a toolkit in prioritizing structural reforms.
- The adequacy of the global financial safety net and the size of the Fund are being assessed to support a more active and forward-looking dialogue on the ongoing effectiveness of the international monetary system and the IMF, in light of ongoing global economic and financial changes.
- The Fund has begun implementing a structured approach for capacity development activities in fragile states tailored to their absorptive capacity with a focus on training and follow-up and results-based monitoring.

Integrated
- Staff took an integrated approach to assessing transition spillovers to member countries, particularly from China rebalancing and low commodity prices.
- Work on enhancing focus on macrofinancial and macrostructural issues in surveillance are underway. Macrofinancial pilots commenced in 67 country staff reports. Staff also published a macrostructural report identifying structural reforms areas that are more likely to have macroeconomic implications.
- The second phase of the G20 Data Gaps Initiative began in January 2016, with increased focus on risk identification, interconnections, and spillovers.
- Efforts to integrate emerging issues into surveillance started. Analyses on climate change, gender, and inequality have been piloted in a few countries where these issues are macro-relevant.
- Staff has developed a new tool to monitor disorderly market conditions, which can help inform country teams about domestic market developments and potential widespread stress. Staff has also provided a conceptual approach to assess the appropriateness of unconventional monetary and FX intervention policies, under such conditions.
- Synergies between surveillance and capacity development were strengthened, including in the areas of revenue mobilization, GFS standards on reporting, data-gathering, inclusive growth, energy subsidy reform, social safety nets, and Islamic finance. In addition, staff has advanced the training curriculum review to align it better with surveillance.

Member-focused
- The Board approved the expansion of the SDR basket to include the renminbi. Staff is working with SDR users and the Chinese authorities to facilitate a smooth transition to the new SDR basket in October 2016.
- The 2010 quota and governance reform was implemented, following its acceptance by the membership. The reforms will ensure that the Fund is able to better meet and represent the needs of its members in a rapidly changing environment.
- Staff continued to engage with and support various fora, including the G20, ASEAN, and organize peer-to-peer events (CCA, MENA, SSA) as well as high-level seminars (Argentina, Brazil, Canada, Cuba, Ghana, Venezuela) on topics of interest to countries.
- The Fund published a paper clarifying the principles of evenhandedness of Fund analysis and advice in surveillance, in response to evidence in the 2014 TSR that it is not evenhanded. The paper also sketches out a possible mechanism for reporting and assessing specific concerns by country authorities.
- Technical assistance and training were scaled up in low income countries, particularly in domestic revenue mobilization and international taxation. In addition, staff has reached out to development partners for a significant scaling up of capacity development in support of the Financing for Development agenda.
- Online learning further expanded the reach of Fund training. Two new online courses, Financial Programming and Policies Part 2 and Macroeconomic Forecasting, were delivered. The Spanish and Russian versions of the Financial Programming and Policies course were also launched to better serve the needs of members.

### Annex III. Implementation of IMF Deliverables (November 2015–April 2016)
Lending, Debt Sustainability, and Restructuring — Agile
- Crisis Program Review
- Strengthening the Post-Program Monitoring Framework
- Reforming the Policy on Non-Toleration of Arrears to Official Creditors
- The Fund’s Lending Framework and Sovereign Debt
- Public Debt Vulnerabilities in LICs

Surveillance — Integrated
Fiscal
- Institutional frameworks
- Enhancing policy efficiency
- Domestic revenue mobilization, including international taxation

Monetary, Macroprudential, and Exchange Rates
- Policy frameworks
- External balances and exchange rates
- Reserve adequacy
- Macroprudential policies
- Capital flow management

Financial Sector Policies
- Global regulatory reforms
- Macrofinancial analysis
- Financial stability
- Managing Systemic Risk
- Assessing de-risking pullbacks from international banks
- Financial development and inclusion
- Islamic Finance
- Data gaps

Structural Reforms and Emerging Issues
- Reforms and upgrade of economic structures
- Revitalizing trade
- Benefits of financial integration
- Implications of climate change
- Demographic transitions, migration, and refugees
- Inclusion and equity

Multilateral Cooperation — Member Oriented
- Fund governance and resources
- Strengthening the International Monetary System
- Standards and Codes

General Operations
- Evenhandedness
- Implementation of the IMF Communications Strategy

- Board papers/reports scheduled to be delivered beyond the horizon under consideration; ongoing work.
- Note: IMF deliverables identified in the Fall 2015 Global Policy Agenda and Work Program. The color coding of the assessment is as follows: Completed Ongoing Delayed

*Content extracted from _041416 - Section 2.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2016/_041416.pdf_