Press Release: IMF to Begin Multilateral Consultations with Focus on Global Imbalances

IMF News, June 5, 2006

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Press Release No. 06/118
Date: June 5, 2006
The International Monetary Fund will begin the first of its proposed multilateral consultations on issues of systemic or regional importance by focusing on how to address global imbalances while maintaining robust global growth.
Multilateral consultations are intended to supplement the IMF's surveillance consultations with individual member countries as proposed in the Fund's Medium-Term Strategy.

The approach was proposed by IMF Managing Director Rodrigo de Rato as part of the Fund's Medium-Term Strategy.
The IMF Executive Board and the International Monetary and Financial Committee (IMFC) have supported this approach (see Press Release No. 06/81).
Multilateral consultations form part of the Fund's multilateral surveillance responsibilities.

Each multilateral consultation will:
- Provide a forum for debate among parties to a common economic issue.
- Strengthen the Fund's analysis of the potential benefits of collective action.
- Aim to enable the Fund and its members to agree upon policy actions to address vulnerabilities that affect individual members and the global financial system.
- Help policy makers demonstrate that proposed measures will be matched by measures taken by others, with benefits to all.
The consultations will focus on a specific international economic or financial issue and directly involve the countries that are party to that issue.
The first multilateral consultation will focus in a comprehensive and collective way on the issue of global imbalances and on spillovers and linkages among economies, rather than on domestic economic issues.
The multilateral consultation will complement and build upon the regular bilateral Article IV consultations that the IMF carries out with all its members.

The first multilateral consultation will involve several systemically important members and groups of members:
- China
- the Euro Area
- Japan
- Saudi Arabia
- the United States
Rationale: "These economies are either ones with large current account surpluses or deficits, or they represent a large share of global output," noted Mr. de Rato. "Their cooperative action can play a major role in the orderly unwinding of these imbalances and in sustaining global growth as savings, consumption and investment patterns adjust."

Staff contacts for the purpose of this consultation will begin soon.
Expected follow-up steps:
- Meetings of Fund management and staff with representatives of all of the participating countries and economies at the senior official and ministerial levels.
- Discussion of the outcome by the IMF's Executive Board, and ultimately by the IMFC.
Expected completion: by the end of 2006.

Press Release No. 06/118, June 5, 2006 — IMF Press Center.