External Sector Reports

2019 External Sector Report: The Dynamics of External Adjustment

July 2019

Full Report and Executive Summary

Key Highlights

After narrowing sharply in the aftermath of the global financial crisis, overall current account surpluses and deficits reached 3 percent of world GDP in 2018, declining marginally while rotating toward advanced economies in recent years. The IMF’s multilateral approach suggests that about 35–45 percent of overall current account surpluses and deficits were deemed excessive in 2018.

Chapter 1: External Positions and Policies

This overview chapter presents the evolution, outlook, and risks from global external positions and summarizes the external assessments of a globally representative set of economies for 2018, which are also detailed in Chapter 3, “2018 Individual Economy Assessments.”

Chapter 2: Exchange Rates and External Adjustment

There is an ongoing debate about the role of exchange rates in facilitating external adjustment. This chapter explores how certain aspects of international trade, namely dominant currency pricing and international integration through global value chains, shape the working of exchange rates to induce external adjustment.

Chapter 3: 2018 Individual Economy Assessments

The individual economy assessments use a wide range of methods to form an integrated and multilaterally consistent view on economies’ external sector positions.