IMF to Begin Multilateral Consultations with Focus on Global ImbalancesPress Release No. 06/118
June 5, 2006
The International Monetary Fund will shortly begin the first of its proposed multilateral consultations on issues of systemic or regional importance by focusing on how to address global imbalances while maintaining robust global growth.
IMF Managing Director Rodrigo de Rato proposed, as part of the Fund's Medium-Term Strategy, supplementing the IMF's surveillance consultations with individual member countries with multilateral consultations. The Executive Board of the IMF and the International Monetary and Financial Committee (IMFC), which provides guidance at a ministerial level to the Fund, have both supported this approach (see Press Release No. 06/81).
Multilateral consultations, which form part of the Fund's multilateral surveillance responsibilities, will provide a forum for debate among parties to a common economic issue. The consultations are intended to strengthen the Fund's analysis of the potential benefits of collective action. They will aim to enable the Fund and its members to agree upon policy actions to address vulnerabilities that affect individual members and the global financial system, and they will help policy makers to show that the measures they propose will be matched by measures taken by others, with benefits to all. Each multilateral consultation will focus on a specific international economic or financial issue and directly involve the countries that are party to that issue.
The first multilateral consultation will focus in a comprehensive and collective way on the issue of global imbalances and involve several systemically important members and groups of members—China, the Euro Area, Japan, Saudi Arabia and the United States—all of which have agreed to participate in this first consultation.
"These economies are either ones with large current account surpluses or deficits, or they represent a large share of global output," Mr. de Rato noted, adding, "Their cooperative action can play a major role in the orderly unwinding of these imbalances and in sustaining global growth as savings, consumption and investment patterns adjust."
The multilateral consultation will focus on spillovers and linkages among these and other economies, rather than on domestic economic issues. It will thus complement and build upon the regular bilateral Article IV consultations that the IMF carries out with all its members.
Staff contacts for the purpose of this consultation will begin soon. It is expected these will be followed by meetings of Fund management and staff with representatives of all of the participating countries and economies at the senior official and ministerial levels. The outcome, which is expected to be completed by the end of 2006, will be discussed, like the IMF's surveillance work in individual countries, by the IMF's Executive Board, and ultimately by the IMFC.