Policy Papers
2024
April 12, 2024
Review of Data Provision to the Fund for Surveillance Purposes
Description: Data provision by member countries is a key input into the IMF’s surveillance activities. The 2024 Review of Data Provision to the Fund for Surveillance Purposes took place against the backdrop of profound shifts in the global economy, highlighting the important need for adequate macroeconomic and financial data to inform analysis and policymaking. This Review achieved a substantial, but manageable, update to the overall envelope of data that members are required to provide to the Fund in the areas of public sector, foreign exchange intervention, and macrofinancial indicators. Addressing these data gaps will reduce blind spots and support even-handedness in Fund surveillance. The Review also introduced a more structured and transparent assessment of data adequacy for surveillance. This strengthened framework will facilitate policy dialogue with the authorities on data issues and improve prioritization of capacity development efforts. Finally, the Review confirmed the long-standing practice of not applying the remedial framework when members do not provide certain data categories that the Fund considers outdated.
April 9, 2024
Review of the Fund’s Capacity Development Strategy—Towards a More Flexible, Integrated, and Tailored Model
Description: Capacity Development (CD), comprising technical assistance and training, fosters economic development by improving human capital and institutions in member countries. Every five years, the IMF reviews its CD Strategy to ensure that CD continues to be of high quality and well-focused on the needs of its members. This review calls for CD to become more flexible, integrated with the Fund’s policy advice and lending, and tailored to respond to member needs. The review benefitted from the recent independent evaluation of the Fund’s CD and a wide range of inputs, including internal and external consultations, surveys of recipients and development partners, staff background studies and recommendations of an External Advisory Group. The vision for CD is informed by the Fund’s comparative advantages and surveillance priorities. The proposals of the current review center around the six key areas: (1) strengthening CD prioritization and integration; (2) enhancing the funding model; (3) strengthening monitoring and evaluation; (4) modernizing modalities; (5) enhancing field presence; and (5) strengthening human resources policies for staff working on CD.
April 9, 2024
Review of The Fund’s Capacity Development Strategy—Background Papers
Description: This supplement includes five background papers and provides background information on various aspects of capacity development (CD) for the main Board paper, Review of the Fund’s Capacity Development Strategy—Towards a More Flexible, Integrated, and Tailored Model. It is divided into five sections, each consisting of a different background paper. The five sections cover (1) CD Delivery Modalities; (2) Evaluation and Impact; (3) Regional Capacity Development Centers and Field Presence; (4) HR Policies; and (5) Mapping the Fund’s Position vis-à-vis Other CD Providers.
April 5, 2024
Resilience and Sustainability Trust―2024 Contribution Agreements with Belgium, Malta, Qatar, and Switzerland
Description: This paper presents Resilience and Sustainability (RST) contribution agreements finalized with four contributors between October 2023 and March 15, 2024. The concluded agreements provide for contributions in a total amount of about SDR 1.2 billion across the three RST accounts – the loan account, deposit account, and reserve account. The new agreements with four members add critical resources that support the continued smooth operations of the RST.
April 4, 2024
Review of the Adequacy of the Fund’s Precautionary Balances
Description: On March 20, 2024, the IMF’s Executive Board reviewed the adequacy of the Fund’s precautionary balances. The review took place somewhat ahead of the standard two-year cycle, in view of the imminent attainment of the current indicative medium-term indicative target of SDR 25 billion for the first time. Precautionary balances comprise the Fund’s general and special reserves. They are a key element of the IMF’s multi-layered framework for managing financial risks. Precautionary balances provide a buffer to protect the Fund against potential losses, resulting from credit, income, and other financial risks. The review was based on the assessment framework established in 2010, which uses an indicative range for precautionary balances, linked to a forward-looking measure of total IMF non-concessional credit, to guide decisions on adjusting the medium-term target over time. While financial risks remain high, they are broadly unchanged from the last review, taking into account the further accumulation of reserves and strengthening of some risk mitigants. Against this background, Executive Directors broadly supported staff’s proposal to retain the current medium-term target of SDR 25 billion and increase the minimum floor from SDR 15 billion to SDR 20 billion. The Board also supported maintaining the biennial review cycle, with earlier reviews if warranted by developments that could materially affect the adequacy of precautionary balances.
April 2, 2024
Macroeconomic Developments and Prospects For Low-Income Countries—2024
Description: The outlook for Low-Income Countries (LICs) is gradually improving, but they face persistent macroeconomic vulnerabilities, including liquidity challenges due to high debt service. There is significant heterogeneity among LICs: the poorest and most fragile countries have faced deep scarring from the pandemic, while those with diversified economies and Frontier Markets are faring better. Achieving inclusive growth and building resilience are essential for LICs to converge with more advanced economies and meet the Sustainable Development Goals (SDGs). Building resilience will also be critical in the context of a more shock-prone world. This requires both decisive domestic actions, including expanding and better targeting Social Safety Nets (SSNs), and substantial external support, including adequate financing, policy advice, capacity development and, where needed, debt relief. The Fund is further stepping up its support through targeted policy advice, capacity building, and financing.
April 1, 2024
Mongolia—Assessment Letter for the Asian Development Bank
Description: This letter updates the assessment of Mongolia’s economic conditions since the conclusion of the IMF’s 2023 Article IV consultation on September 14, 2023. The assessment has been requested in relation to the program loan under the Asian Development Bank’s Policy Based Lending modality.
March 19, 2024
Extension of Temporary Increase in Normal Access Limits Under the General Resources Account
Description: The IMF extended the current temporarily higher General Resources Account (GRA) normal annual and cumulative access limits, 200 percent of quota and 600 percent of quota, respectively, until end-2024. Initially, access limits were temporarily increased for 12 months in March 2023. The extension reflects the still uncertain global economic environment. Importantly, it helps bridge the gap to the comprehensive review of access limits planned for the second half of 2024, which will review access limits in the context of the developments of the nominal value of access limits against relevant macroeconomic aggregates and the outcomes of the 16th General Review of Quotas (GRQ). The impact on GRA resources and risks to the Fund from the extension of higher access limits are expected to be manageable.
March 11, 2024
Industrial Policy Coverage in IMF Surveillance— Broad Considerations
Description: The paper aims to provide a conceptual framework and guiding principles for the coverage of Industrial Policy (IP) in IMF surveillance. It proposes a working definition of industrial policy, discusses its objectives and main instruments, and provides a brief review of academic literature on IP. The paper discusses the four broad sets of considerations for assessing IP: justification, design, cost-benefit assessment, and implementation. It stresses that IP should be covered in IMF surveillance when it is deemed macro-critical and/or has the potential to generate significant cross-border spillovers. The paper also discusses specific aspects of industrial policies, including trade-related IP, green IP, Special Economic Zones (SEZs), and State-Owned Enterprises (SOEs), and provides examples of the IP coverage in the Article IV consultations with China, Euro Area, Indonesia, Saudi Arabia, and the United States.
March 6, 2024
Rollback of Credit Arrangements in the New Arrangements to Borrow
Description: This paper presents a proposal for aggregate reduction of the New Arrangements to Borrow (NAB) by 16.8 percent (SDR 61.3 billion), while broadly preserving relative shares of NAB participants, in line with guidance by the BoG Resolution No. 79-1 on the Sixteenth General Review of Quotas (adopted on December 15, 2023). The objective is to maintain the Fund’s lending capacity as a result of the proposed 50 percent quota increases, conditional on a reduction (“rollback”) in the NAB credit arrangements and taking into account also the expiration of the 2020 Bilateral Borrowing Agreements. Changes in NAB credit arrangements require high levels of support from NAB participants. A safeguard mechanism allows the rollback to become effective provided that participants representing at least 90 percent of credit arrangements have consented to this proposal. The effectiveness of the rollback of NAB credit arrangements would be tied to the effectiveness of the quota increases under the Sixteenth General Review of Quotas.