{
  "title": "Fit for Purpose—Adapting IMF Advice to a New Economic Landscape",
  "publication": "IMF Blog, May 24, 2021",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2021/05/24/blog052421-fit-for-purpose-adapting-imf-advice-to-a-new-economic-landscape",
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  "summary": "Authors: Fabian Bornhorst, Ceyla Pazarbasioglu",
  "sections": [
    {
      "heading": "Overview and context",
      "content": "- Authors: Fabian Bornhorst, Ceyla Pazarbasioglu\n- Publication date: May 24, 2021\n- Core message: The IMF is modernizing its surveillance—its regular policy advice to members—by evolving both the substance of advice and how it engages with member countries, in response to a fast-changing global economy and the COVID-19 crisis.\n- Continuity: The Article IV consultations will continue to cover fiscal, monetary, exchange rate and financial issues.\n- Institutional milestone: The 2021 Comprehensive Surveillance Review (CSR) was recently approved by the Fund’s Executive Board; it is the first Review since 2014."
    },
    {
      "heading": "Major challenges motivating change",
      "content": "- COVID-19: Described as a watershed moment that exposed new risks and spillovers and created significant uncertainties about the recovery.\n- Pre-existing transformational pressures: Increasing interconnectedness, accelerating digitalization, rising inequality, and the priority of addressing climate change.\n- Policy dilemmas highlighted:\n  - How to calibrate policies to maintain adequate support while ensuring stability and sustained growth.\n  - How to respond when conventional macroeconomic tools have limited room for maneuver due to prior extensive use (e.g., since the Global Financial Crisis).\n  - How to manage asynchronous and divergent recoveries so countries still grappling with the pandemic do not fall further behind."
    },
    {
      "heading": "The 2021 Comprehensive Surveillance Review: four priorities",
      "content": "- Confronting risks and uncertainties\n  - Policy advice will better assess a range of possible outcomes to prepare for worse-than-expected scenarios and to exploit positive surprises.\n  - Emphasis on improved understanding of risk-reward trade-offs, contingency planning, and risk management.\n  - Advice can include quantitative considerations (for example, how much insurance to buy against natural disasters) and qualitative aspects (for example, how to take advantage of a growth windfall).\n- Preempting and mitigating spillovers\n  - Recognizes the scale of global interconnectedness and that events in one country can have sizable effects globally.\n  - Addresses divergent recoveries and new sources of spillovers, including from health policies, climate change, and digitalization.\n  - Calls for identifying and assessing economic and policy spillovers and providing advice to mitigate and pre-empt them.\n  - Stresses international economic cooperation and better dialogue between spillover producers and spillover receivers.\n- Fostering economic sustainability\n  - Advocates a broader understanding of economic sustainability beyond short-term stability.\n  - Systematic discussion of trends in demographics, inequality, socio-political developments, and climate change when they are macro-critical.\n  - Notes that not all trends are equally pressing for all countries—country-specific circumstances determine macro-criticality.\n- A unified approach to policy advice\n  - Balancing competing priorities with limited room for maneuver is the key challenge.\n  - During the pandemic, countries simultaneously deployed various policy tools that required careful calibration and understanding of complementarities and conflicting objectives.\n  - Highlights the need for coordination of fiscal and structural policies where relevant, and deeper integration of macro-financial analysis where financial risks are building.\n  - For countries dealing with capital flows and external shocks, the Integrated Policy Framework (IPF) provides an analytical approach to selecting an appropriate policy mix.\n  - Unified policy advice helps decision makers discuss trade-offs and identify synergies."
    },
    {
      "heading": "Practical implications for IMF surveillance and Article IV consultations",
      "content": "- Reporting and coverage\n  - The Article IV consultations will continue to provide a comprehensive assessment covering fiscal, monetary, external, financial and structural policies.\n  - Reports will be more focused and will better integrate macrofinancial aspects, risk assessment and contingency planning, spillovers, and capacity development.\n- Use of technology and data\n  - New technologies and enhanced data availability will modernize business practices and enhance the relevance of surveillance.\n- Granularity and country specificity\n  - Policy advice will become more granular and country-specific, particularly for pressing new questions (examples: limiting economic scarring, providing targeted support to firms).\n  - Increased emphasis on peer-learning and ensuring IMF advice is informed by early identification of cross-cutting policy issues and lessons from country experiences.\n- Implementation outlook\n  - The Comprehensive Surveillance Review is an important milestone, but implementation will be gradual.\n  - The IMF positions itself as a learning institution—ready to adapt, experiment, and revise—to deliver agile and effective advice amid uncertain future events and unforeseen shocks."
    },
    {
      "heading": "Engagement and feedback",
      "content": "- The page invites stakeholder input and notes a \"3-question survey\" on IMFBlog for readers to provide feedback.\n\nSource: IMF blog page \"Fit for Purpose—Adapting IMF Advice to a New Economic Landscape\", May 24, 2021.\n\n---\n\n\n References\n\n- عربي\n- Español,\n- 日本語\n- surveillance\n- 2021 Comprehensive Surveillance Review\n- Confronting risks and uncertainties\n- Preempting and mitigating spillovers\n- Fostering economic sustainability\n- climate change\n- deeper integration of macro-financial analysis\n- Integrated Policy Framework\n- What it means in practice\n- CSR website\n\nSource: https://www.imf.org/en/blogs/articles/2021/05/24/blog052421-fit-for-purpose-adapting-imf-advice-to-a-new-economic-landscape"
    }
  ],
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    "[Markdown version](/en/blogs/articles/2021/05/24/blog052421-fit-for-purpose-adapting-imf-advice-to-a-new-economic-landscape/index.md)",
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    "[Bundle manifest](/en/blogs/articles/2021/05/24/blog052421-fit-for-purpose-adapting-imf-advice-to-a-new-economic-landscape/bundle-manifest.json)",
    "Authors: Fabian Bornhorst, Ceyla Pazarbasioglu",
    "Published: May 24, 2021",
    "Authors: Fabian Bornhorst, Ceyla Pazarbasioglu",
    "Publication date: May 24, 2021",
    "Core message: The IMF is modernizing its surveillance—its regular policy advice to members—by evolving both the substance of advice and how it engages with member countries, in response to a fast-changing global economy and the COVID-19 crisis.",
    "Continuity: The Article IV consultations will continue to cover fiscal, monetary, exchange rate and financial issues.",
    "Institutional milestone: The 2021 Comprehensive Surveillance Review (CSR) was recently approved by the Fund’s Executive Board; it is the first Review since 2014.",
    "COVID-19: Described as a watershed moment that exposed new risks and spillovers and created significant uncertainties about the recovery.",
    "Pre-existing transformational pressures: Increasing interconnectedness, accelerating digitalization, rising inequality, and the priority of addressing climate change.",
    "Policy dilemmas highlighted:",
    "Confronting risks and uncertainties",
    "Preempting and mitigating spillovers",
    "Fostering economic sustainability",
    "A unified approach to policy advice",
    "Reporting and coverage",
    "Use of technology and data",
    "Granularity and country specificity",
    "Implementation outlook",
    "The page invites stakeholder input and notes a \"3-question survey\" on IMFBlog for readers to provide feedback.",
    "[عربي](https://www.imf.org/ar/News/Articles/2021/05/24/blog052421-fit-for-purpose-adapting-imf-advice-to-a-new-economic-landscape)",
    "[Español,](https://blog-dialogoafondo.imf.org/?p=15744)",
    "[日本語](https://www.imf.org/ja/News/Articles/2021/05/24/blog052421-fit-for-purpose-adapting-imf-advice-to-a-new-economic-landscape)",
    "[surveillance](https://www.imf.org/en/About/Factsheets/IMF-Surveillance)",
    "[2021 Comprehensive Surveillance Review](https://www.imf.org/en/Topics/Comprehensive-Surveillance-Review)",
    "[Confronting risks and uncertainties](https://www.imf.org/en/Publications/Policy-Papers/Issues/2021/05/18/2021-Comprehensive-Surveillance-Review-Background-Paper-on-The-Surveillance-Priority-460276)",
    "[Preempting and mitigating spillovers](https://www.imf.org/en/Publications/Policy-Papers/Issues/2021/05/18/2021-Comprehensive-Surveillance-Review-Background-Paper-on-The-Surveillance-Priority-460297)",
    "[Fostering economic sustainability](https://www.imf.org/en/Publications/Policy-Papers/Issues/2021/05/18/2021-Comprehensive-Surveillance-Review-Background-Paper-on-The-Surveillance-Priority-460300)",
    "[climate change](https://www.imf.org/en/Publications/Policy-Papers/Issues/2021/05/18/2021-Comprehensive-Surveillance-Review-Background-Paper-on-Integrating-Climate-Change-into-460303)",
    "[deeper integration of macro-financial analysis](https://www.imf.org/en/Publications/Policy-Papers/Issues/2021/05/18/2021-Comprehensive-Surveillance-Review-Background-Paper-on-Systemic-Risk-and-460306)",
    "[Integrated Policy Framework](https://www.imf.org/en/Publications/Policy-Papers/Issues/2020/10/08/Toward-an-Integrated-Policy-Framework-49813)",
    "[What it means in practice](https://www.imf.org/en/Publications/Policy-Papers/Issues/2021/05/18/2021-Comprehensive-Surveillance-Review-Modalities-for-Modernizing-Surveillance-460273)",
    "[CSR website](https://www.imf.org/CSR)"
  ],
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