International Monetary Fund

2013 IMF External Sector Assessments

Last Updated: August 9, 2013

2013 Pilot External Sector Report


he 2013 Pilot External Sector Report and accompanying individual economy assessments are 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 an updated 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.

2013 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 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), capital controls, and reserve accumulation, financial policies, and monetary policy. The approach can also identify whether the home country's policies need to change or whether other economies should change course.

An extended description of the EBA methodology, as well as data and estimates from the EBA exercise, are available online.