International Monetary Fund

2012 IMF External Sector Assessments

Last Updated: July 28, 2017

2012 Pilot External Sector Report


he 2012 Pilot External Sector Report is aimed at making surveillance of external imbalances more effective. The analysis broadens external sector surveillance by more systematically assessing, in addition to exchange rates, current accounts, balance sheet positions, reserves adequacy, capital flows, and capital flow measures. In doing so it combines multilateral and bilateral perspectives in a single report.

The pilot provides a snapshot of multilaterally consistent analysis for the external positions of the largest economies simultaneously (covering 28 large economies and the Euro Area), and points to potential policy responses. It uses a new Pilot External Balance Assessment approach, together with judgment, to assess external imbalances―while acknowledging the uncertainties inherent in such assessments.

The report ensures that assessments are candid and evenhanded. The same methodologies are applied to all countries and assessments for individual countries are multilaterally consistent. At the same time, country teams provide in-depth knowledge of country-specific factors to identify those not captured by models.

Pilot External Balance Assessment Approach

The Pilot External Balance Assessment (EBA) approach being developed by the Research Department is used as an input to the assessment of current accounts and real exchange rates in the pilot report. The new EBA builds on and improves previous methods (the IMF's Consultative Group on Exchange Rates, Occasional Paper 261). The approach strips out the influence of cyclical factors and allows one to identify the impact on a country's current account of policy distortions in fiscal policy, social protection, capital controls and reserve accumulation. The approach can also identify whether the home country's policies need to change or whether other economies should change course.

A short overview of the methodology is provided as Appendix I (page 27) in the Pilot External Sector Report. An extended description of the methodology, as well as data and estimates from a pilot EBA exercise, are also available online.


The Pilot External Sector Report and External Balance Assessment are intended as a test run and the IMF plans to further refine its approach to external sector surveillance. As part of this process, the IMF is consulting with officials, academics, the private sector, and civil society among others.

Feedback and comments on the new report and the External Balance Assessment methodology are welcome