## Growth at Risk: Concept and Application in IMF Country Surveillance

_IMF Working Papers, February 21, 2019_

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## Bibliographic details
- Authors: Ananthakrishnan Prasad, Selim A Elekdag, Phakawa Jeasakul, Romain Lafarguette, Adrian Alter, Alan Xiaochen Feng, Changchun Wang
- Published: February 21, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484397015.001

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### Summary and Purpose
- The growth-at-risk (GaR) framework links current macrofinancial conditions to the distribution of future GDP growth.
- Main strengths:
  - Assesses the entire distribution of future GDP growth (in contrast to point forecasts).
  - Quantifies macrofinancial risks in terms of growth.
  - Monitors the evolution of risks to economic activity over time.
- Policy relevance:
  - By using GaR analysis, policymakers can quantify the likelihood of risk scenarios to serve as a basis for preemptive action.
- Practical content:
  - Offers practical guidance on how to conduct GaR analysis.
  - Draws lessons from country case studies.
  - Discusses an Excel-based GaR tool developed to support the IMF’s bilateral surveillance efforts.

### Key Findings and Analytical Features
- GaR’s distinct contributions:
  - Focus on distributional outcomes of GDP growth rather than single-point forecasts.
  - Translation of macrofinancial conditions into growth-risk metrics.
  - Enables monitoring of risk evolution over time for surveillance and policy use.
- Use cases highlighted:
  - Country case studies provide empirical lessons (details within full paper).
  - An Excel-based GaR tool intended to support bilateral surveillance.

### Policy Implications and Recommendations
- Policymakers can:
  - Quantify likelihoods of adverse growth scenarios using GaR outputs.
  - Use quantified scenario probabilities as a basis for preemptive policy action.
- Surveillance application:
  - GaR can be integrated into IMF country surveillance to better capture macrofinancial risks to growth.

### Subjects and Keywords (as listed)
- Subject: Asset prices, Credit aggregates, Financial sector policy and analysis, Financial statements, Growth-at-risk assessment, Housing prices, Money, Prices, Public financial management (PFM)
- Keywords: accommodative financial conditions, asset price, Asset prices, Credit aggregates, financial conditions partition, Financial statements, GaR analysis, GaR approach, GaR concept, GaR framework, GaR tool, GDP growth, Global, growth distribution, Growth-at-risk assessment, house price growth, Housing prices, price of risk, scenario analysis, term premium, WP

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_Source: https://www.imf.org/en/publications/wp/issues/2019/02/21/growth-at-risk-concept-and-application-in-imf-country-surveillance-46567_