IMF External Sector Reports

Last Updated: July 19, 2023

External Sector Reports (ESR)

The External Sector Report analyzes global external developments and provides multilaterally consistent assessments of external positions of the world’s largest economies, representing over 90 percent of global GDP. The report includes: (i) an overview chapter that emphasizes multilateral issues, showing how individual economies fit into the global picture and discussing associated risks and policies needed to reduce excess imbalances; (ii) an analytical chapter that covers topics relevant to the analysis of external sector dynamics and adjustment mechanisms; and (ii) a final chapter that provides details of the external assessment of each of the 30 economies considered.

The External Sector Report, produced annually since 2012, is a key part of the IMF’s surveillance. External assessments are arrived at by integrating multilateral and country-specific perspectives, while ensuring individual economy assessments add up to a coherent, multilaterally consistent view. Specifically, staff assessments draw on estimates from the External Balance Assessment approach as well as country-specific evidence and judgment, while acknowledging the uncertainties inherent in such assessment (see IMF Blog on Assessing Global Imbalances: The Nuts and Bolts for more details).

External Balance Assessment Approach

The External Balance Assessment (EBA) approach, and its different vintages, is used as an input to the staff assessments of current accounts and real exchange rates. The objective of the EBA approach is to inform a normative evaluation, taking account of the effects of policies and potential policy distortions. In contrast to analyses that seek to predict future values of current accounts and exchange rates, EBA seeks to identify levels that would be consistent with country fundamental characteristics and desirable settings of relevant policies. EBA strips out the influence of cyclical factors and allows one to estimate the impact on a country's current account and real exchange rate of potential policy distortions in the areas of fiscal policy, social protection (public health expenditure in particular), capital controls, reserve accumulation, financial policies, and monetary policy. The approach estimates the impact of both domestic and foreign influences on an economy’s current account and exchange rate.

The data inputs and estimates of the EBA model are available online

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