IMF Survey : Work Program Aims to Get Growth Going Again

IMF News, July 12, 2016

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Work program covers the next twelve months with emphasis on getting the global economy back on a stronger and safer track to growth.
IMF proposes a three-pronged approach—monetary, fiscal, structural—to spur growth.
Focus to be on new and emerging issues along with longstanding areas for reform.
Ongoing transitions in the global economy call for strong global cooperation.
Publication date: July 12, 2016.

This work program is in line with the directions laid out in the Global Policy Agenda and the International Monetary and Financial Committee communiqué released in April.
The work program highlights activities to support the three-pronged approach of monetary, fiscal, and structural actions to boost growth.
The work program also lays out work to help member countries address emerging issues (such as climate change and inequality) and strengthen the international monetary system.

Continue to study the implications of unconventional monetary policies and their spillovers to other economies, particularly emerging markets.
Review member country experience in dealing with capital flows in recent years to get a clearer picture of associated macroeconomic and financial stability risks.
Related area of focus: capital flow management.

Intensify efforts to deepen macrofinancial analysis and strengthen members’ supervisory and regulatory frameworks.
Take stock of progress on global and regional financial regulatory reforms in light of increased risks to global financial stability.
Analyze drivers and consequences of trends in correspondent banking relationships and discuss the role the Fund can play.
Agenda includes items related to managing financial sector vulnerabilities and reducing risk.

Fiscal policy needs to do more in some countries, as monetary policy cannot bear the entire burden of responding to current challenges.
Fiscal policy can play a bigger role in supporting demand in countries where fiscal space exists.
IMF will work on a set of considerations for how to assess fiscal space, with the goal of producing consistent assessments across countries.
How and whether to use fiscal space would be informed by country specific considerations, such as fiscal rules and frameworks.
IMF will spearhead an infrastructure policy support initiative, focused on helping countries increase the efficiency of public investment and, where appropriate, identify options to sustainably scale up infrastructure spending.
- The initiative—to be piloted in a number of countries—is expected to shed light on which policies should be prioritized for infrastructure investment to achieve strong and durable growth.
For low-income countries, the IMF will continue to support efforts to boost domestic revenue mobilization in developing countries and plans to outline a framework for building fiscal management capacity in fragile states.

Increase focus on the role of structural reforms in improving productivity and growth.
Staff will develop a toolkit on structural reforms for country teams to use in annual assessments, taking into account stage of development, cyclical position, and available policy space.
Produce a new reference note on trade and trade policy issues—the first since 2010—within the coming year.
Undertake a review of the role of the Fund in governance issues early next year, given obstacles posed by endemic corruption to achieving inclusive growth.

Enhance and refine policy advice on emerging issues: social, political, demographic, environmental, biological, or technological challenges that can affect macroeconomic stability.
Continue efforts to integrate climate change and energy issues in IMF surveillance.
- Developing a tool to evaluate a range of fiscal and other measures relating to the mitigation of climate change for use in country work.
- Focus on the role of climate change and natural disasters in the economies of small states and other vulnerable economies.
Continue work on demographic transitions and migration, building on previous analysis of the impact of migration on receiving countries.
- Examine the impact of economic emigration on private sector activity, competitiveness, public finance, and growth and convergence of countries whose citizens emigrate.
Continue to integrate gender analysis in surveillance and strive for a better understanding of inequality in developing countries.
Begin innovative analytical work on the interplay of finance and technology.

Study how best to strengthen global mechanisms for adjustment and liquidity provision to boost the effectiveness of the international monetary system.
Work on key areas for reform: mechanisms for crisis prevention and adjustment; enhanced global cooperation on policies affecting global stability; and the global financial safety net (GFSN).
Undertake further work on the role of the Special Drawing Right (SDR).
Explore how to strengthen coordination with regional financing arrangements regarding the GFSN.
Revisit the lending toolkit to see how best to assist countries hit by the historic decline in commodity prices.
Review lending and program design to ensure IMF-supported programs in developing countries place sufficient emphasis on softening the adverse impact of some macroeconomic policies.

Review of member country experience with capital flows.
Stocktaking of progress on global and regional financial regulatory reforms.
Development of consistent assessments for fiscal space across countries.
Infrastructure policy support initiative, piloted in a number of countries.
Toolkit on structural reforms for country teams.
New reference note on trade and trade policy issues (first since 2010).
Tool to evaluate fiscal and other measures for climate change mitigation to be used in country work.
Review of the Fund’s role in governance issues early next year.

IMF Survey : Work Program Aims to Get Growth Going Again — July 12, 2016