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IMF Staff Completes 2019 Article IV Mission on Iraq DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

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IMF Staff Completes 2019 Article IV Mission on Iraq Empty IMF Staff Completes 2019 Article IV Mission on Iraq

Post by claud39 on Mon May 06, 2019 9:22 pm

IMF Staff Completes 2019 Article IV Mission on Iraq

May 6, 2019
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.

  • Near-term vulnerabilities subsided in 2018, with the budget in surplus and a build-up in central bank reserves. Post-war reconstruction has been limited so far.

  • Fiscal deficits are projected to rise over the medium term, absent policy changes, and it will be hard to sustain capital spending. Growth is likely to slow markedly.

  • Tight control over current spending, particularly wages, and phased measures to boost non-oil revenue would make space for scaling up public investment and building fiscal buffers.


An International Monetary Fund (IMF) team led by Gavin Gray visited Amman from April 26 to May 2, to hold discussions with the Iraqi authorities in the context of the 2019 Article IV Consultation. At the end of the visit, Mr. Gray made the following statement:
 
“The end of the war with ISIS and a rebound in oil prices provide an opportunity to rebuild the country and address long-standing socio-economic needs. However, the challenges to achieving these objectives are formidable. The economic recovery has been sluggish, post-war reconstruction is limited, and large current spending increases risk placing the public finances and central bank reserves on an unsustainable path. Moreover, combatting corruption is critical to promote the effectiveness of public institutions and to support private-sector investment and job creation.
 
“Near-term vulnerabilities subsided in 2018, with the budget in surplus and a build-up in central bank reserves. Non-oil growth is expected to increase to 5.4 percent in 2019 on the back of higher investment spending. However, fiscal deficits are projected to rise over the medium term, requiring financing that may crowd out the private sector or erode central bank reserves. In these circumstances, it would be hard to sustain capital spending, and growth would slow markedly.
 
“Policy changes and structural reforms—including to improve governance—are therefore essential to maintain medium-term sustainability and lay the foundations for inclusive growth.
 
“Fiscal policy should aim to scale up public investment gradually while building fiscal buffers. To make space for this, staff recommends budgetary savings of around 9 percent of GDP over the medium term through tight control of current spending, particularly public-sector wages, and phased measures to boost non-oil revenue. Setting ceilings on current expenditure in the 2020 budget onwards would strengthen the fiscal framework’s capacity to support higher capital spending and to adapt to oil price shocks. Key reforms should include:
 

  • Containing public-sector wages. Spending pressures could be dampened in the short run through compensation measures such as capping allowances, bonuses and other non‑base wage payments, and by not fully replacing retirees. Structural measures will be required over the medium term, based on a functional workforce review as well as deeper civil service reform once new HR management and information systems are in place.
     

  • Electricity reforms are key to addressing the weak quality of service and reducing the high budgetary costs, due to modest tariff rates, chronic non-payment of electricity bills, poor maintenance and over-reliance on expensive generation sources, coupled with losses throughout the generation, transmission, and distribution process. It would be important to ensure that the poor and most vulnerable are protected throughout this reform.
     

  • Bolstering public financial management. Enhancing the legal framework and improving commitment and other control systems are key to minimizing misuse of public resources and restoring budgetary discipline.


 
In the financial sector, a robust plan to restructure the large public banks coupled with enhanced supervision is essential to secure financial stability and will help promote financial development and inclusion. Strengthening anti-money laundering and countering financing terrorism (AML/CFT) controls and oversight will help prevent Iraq’s financial sector from being misused for the laundering of criminal proceeds and terrorist financing.
 
“Addressing governance weaknesses and corruption vulnerabilities is critical to achieving the described policy objectives. As a first step, the authorities need to develop a comprehensive understanding of the corruption risks present in Iraq and then implement policies to tackle these risks in a coherent and coordinated manner. The legislative framework needs to be strengthened to effectively prevent officials from abusing their position or misusing state resources. To this end, laws strengthening the asset declaration regime and criminalizing illicit gains should be rapidly adopted. Furthermore, the independence and integrity of bodies involved in combatting corruption should be ensured and the AML/CFT regime should be mobilized to support anti-corruption efforts.
The team will prepare a report that, subject to management approval, is tentatively scheduled to be considered by the IMF’s Executive Board in July 2019.
 
“The IMF team would like to thank the authorities for the candid and constructive discussions during this visit.”
 

IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: WAFA AMR
PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG






https://www.imf.org/en/News/Articles/2019/05/06/pr19142-Iraq-imf-staff-completes-2019-article-iv-mission


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IMF Staff Completes 2019 Article IV Mission on Iraq Empty International Monetary Fund for Iraq: Fighting corruption is crucial to support private sector investment

Post by claud39 on Mon May 06, 2019 9:27 pm

International Monetary Fund for Iraq: Fighting corruption is crucial to support private sector investment




06 May 2019 10:48 PM





IMF Staff Completes 2019 Article IV Mission on Iraq 1024












BAGHDAD (Reuters) - The weakness of Iraq's economy has fallen in the short term in 2018, with the budget surplus and the accumulation of central bank reserves, and post-war reconstruction has been limited so far, the IMF said.

The IMF expects the fiscal deficit to rise over the medium term, with no policy changes, it will be difficult to maintain capital spending, and growth is likely to slow significantly.

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Strict control over current spending, particularly wages, and interim measures to increase non-oil revenues would provide room for increased public investment and the construction of temporary financial stores, the IMF said in a statement on Monday.

A team from the International Monetary Fund ( IMF ), led by Gavin Gray, visited Amman from April 26 to May 2 for discussions with the Iraqi authorities in the context of Article IV consultations of 2019.

At the end of the visit, Gavin Gray said that the end of the war with the boom and the revival of oil prices provide an opportunity to rebuild the country and meet long-standing social and economic needs.

However, the challenges to achieving these goals are enormous, the economic recovery has been slow, post-war reconstruction is limited, and the current large spending increases the risk of placing public funds and central bank reserves on an unsustainable path.

In addition, combating corruption was crucial to enhancing the effectiveness of public institutions, supporting private sector investment and creating jobs.

Non-oil growth is expected to rise to 5.4 percent in 2019 on the back of increased investment spending, while the fiscal deficit is expected to rise over the medium term, requiring funding that could lead to private sector congestion or erosion of central bank reserves.

He noted that in these circumstances, it would be difficult to maintain capital expenditure, and growth will slow significantly.

Changes in policies and structural reforms - including improved management - were essential to sustain medium-term sustainability and lay the foundations for inclusive growth.

He stressed that fiscal policy should aim to gradually increase public investment while building temporary financial stores. To make room for this, staff recommended savings of about 9 per cent of GDP over the medium term through tight control of current expenditure, In particular public sector wages, and phased measures to increase non-oil revenues.

In his statement, the head of the Sandango mission stated that setting the ceilings for current expenditures in the 2020 budget and beyond would strengthen the fiscal framework's capacity to support increased capital expenditure and to adjust to oil price shocks.

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IMF Staff Completes 2019 Article IV Mission on Iraq Empty IMF: Non-Oil Growth to Increase to 5.4%

Post by claud39 on Tue May 07, 2019 8:04 am

IMF: Non-Oil Growth to Increase to 5.4%
7th May 2019 


IMF Staff Completes 2019 Article IV Mission on Iraq IMF-Executive-Board-623x346



7th May 2019 in Iraq Industry & Trade NewsPolitics

IMF Staff Completes 2019 Article IV Mission on Iraq

An International Monetary Fund (IMF) team led by Gavin Gray visited Amman from April 26 to May 2, to hold discussions with the Iraqi authorities in the context of the 2019 Article IV Consultation.
At the end of the visit, Mr. Gray made the following statement:
“The end of the war with ISIS and a rebound in oil prices provide an opportunity to rebuild the country and address long-standing socio-economic needs. However, the challenges to achieving these objectives are formidable. The economic recovery has been sluggish, post-war reconstruction is limited, and large current spending increases risk placing the public finances and central bank reserves on an unsustainable path. Moreover, combatting corruption is critical to promote the effectiveness of public institutions and to support private-sector investment and job creation.
“Near-term vulnerabilities subsided in 2018, with the budget in surplus and a build-up in central bank reserves. Non-oil growth is expected to increase to 5.4 percent in 2019 on the back of higher investment spending. However, fiscal deficits are projected to rise over the medium term, requiring financing that may crowd out the private sector or erode central bank reserves. In these circumstances, it would be hard to sustain capital spending, and growth would slow markedly.
“Policy changes and structural reforms—including to improve governance—are therefore essential to maintain medium-term sustainability and lay the foundations for inclusive growth.
“Fiscal policy should aim to scale up public investment gradually while building fiscal buffers. To make space for this, staff recommends budgetary savings of around 9 percent of GDP over the medium term through tight control of current spending, particularly public-sector wages, and phased measures to boost non-oil revenue. Setting ceilings on current expenditure in the 2020 budget onwards would strengthen the fiscal framework’s capacity to support higher capital spending and to adapt to oil price shocks. Key reforms should include:

  • Containing public-sector wages. Spending pressures could be dampened in the short run through compensation measures such as capping allowances, bonuses and other non‑base wage payments, and by not fully replacing retirees. Structural measures will be required over the medium term, based on a functional workforce review as well as deeper civil service reform once new HR management and information systems are in place.

  • Electricity reforms are key to addressing the weak quality of service and reducing the high budgetary costs, due to modest tariff rates, chronic non-payment of electricity bills, poor maintenance and over-reliance on expensive generation sources, coupled with losses throughout the generation, transmission, and distribution process. It would be important to ensure that the poor and most vulnerable are protected throughout this reform.

  • Bolstering public financial management. Enhancing the legal framework and improving commitment and other control systems are key to minimizing misuse of public resources and restoring budgetary discipline.



“In the financial sector, a robust plan to restructure the large public banks coupled with enhanced supervision is essential to secure financial stability and will help promote financial development and inclusion. Strengthening anti-money laundering and countering financing terrorism (AML/CFT) controls and oversight will help prevent Iraq’s financial sector from being misused for the laundering of criminal proceeds and terrorist financing.
“Addressing governance weaknesses and corruption vulnerabilities is critical to achieving the described policy objectives. As a first step, the authorities need to develop a comprehensive understanding of the corruption risks present in Iraq and then implement policies to tackle these risks in a coherent and coordinated manner. The legislative framework needs to be strengthened to effectively prevent officials from abusing their position or misusing state resources. To this end, laws strengthening the asset declaration regime and criminalizing illicit gains should be rapidly adopted. Furthermore, the independence and integrity of bodies involved in combatting corruption should be ensured and the AML/CFT regime should be mobilized to support anti-corruption efforts.
The team will prepare a report that, subject to management approval, is tentatively scheduled to be considered by the IMF’s Executive Board in July 2019.
“The IMF team would like to thank the authorities for the candid and constructive discussions during this visit.”
(Source: IMF)



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IMF Staff Completes 2019 Article IV Mission on Iraq Empty The International Monetary Fund sets out 3 structural measures to reform Iraq's finances, including wages and electricity

Post by claud39 on Tue May 07, 2019 1:51 pm

The International Monetary Fund sets out 3 structural measures to reform Iraq's finances, including wages and electricity




 06 May 2019 11:03 PM





IMF Staff Completes 2019 Article IV Mission on Iraq 1024








BAGHDAD - The head of the International Monetary Fund's mission to Iraq, Gavin Gray, has recommended a number of key reforms Iraq must follow to reform the financial structure.

The head of the IMF mission said that the first of these reforms was public sector wages, which could reduce short-term spending pressures through compensation measures such as the identification of allowances, bonuses and other non-core payments, and full replacement of pensioners.

   - International Monetary Fund for Iraq: Fighting corruption is crucial to support private sector investment

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Structural measures would be required over the medium term, based on a functional review of the workforce as well as a deeper reform of the civil service once new human resource and information management systems were in place.

The second recommendation on electricity reforms, which was seen as an essential factor in addressing poor quality of service and reducing high budget costs, was due to the modest rates of consumer tariffs, the non-payment of chronic electricity bills, poor maintenance and excessive reliance on expensive sources of generation, All stages of generation, transmission, and distribution.

The head of the IMF mission stressed the importance of ensuring protection of the poor and the most vulnerable during this reform.

The latest recommendation of the head of the IMF mission on strengthening public financial management, in which he explained that strengthening the legal framework and improving compliance and other oversight systems was a key element in reducing misuse of public resources and restoring budgetary discipline.

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IMF Staff Completes 2019 Article IV Mission on Iraq Empty IMF completes Article IV consultations on Iraq

Post by claud39 on Tue May 07, 2019 1:54 pm

IMF completes Article IV consultations on Iraq


 07 May 2019 12:22 PM





IMF Staff Completes 2019 Article IV Mission on Iraq 1024








A team from the International Monetary Fund, headed by Gavin Gray , visited the Jordanian capital of Amman from 25 April to 2 May, with the aim of holding discussions with the Iraqi authorities in the context of Article IV consultations , For 2019.

At the end of the visit, according to a statement by the IMF, Gray said the end of the war on a buoyant organization and the resurgence of oil prices offer an opportunity to rebuild Iraq and overcome long-standing socio-economic problems.

"But the challenges to achieving these goals are enormous, the pace of economic recovery is still slow, reconstruction is very limited after the war is over, and the large current spending increases risk, putting public funds and central bank reserves on track Its continuity can not be sustained.

Anti-corruption was very important to enhance the effectiveness of public institutions, to support investment efforts and to create employment by the private sector .

"In the short term, the short-term weakness is reversed in 2018, with a surplus in the budget and a build-up in the central bank's reserves," he said.

Non-oil growth is expected to rise to 5.4 percent in 2019 on the back of increased investment spending; however, fiscal deficits are expected to rise in the medium term, requiring funding that could squeeze the private sector or erode the central bank's reserves.

Under these conditions, capital spending may be difficult to sustain, and growth will likely slow considerably .

" Therefore, policy changes and structural reforms - including improved governance - are essential to sustain medium-term economic sustainability and to lay the foundations for inclusive growth," he said .

"The fiscal policy should be based on the gradual expansion of public investment, while at the same time building safety margins," said the head of the mission.

"To find the required space, IFAD staff recommends budget savings of about 9 percent of GDP over the medium term by tightening control over current spending, especially on public sector wages, and taking phased measures to boost revenue Non-oil.

He explained that setting ceilings for current budget spending, starting with the 2020 budget onwards, would enhance the fiscal framework's ability to support a higher volume of investment and adapt to the shocks in oil prices. Major reforms should include :

The containment of public sector wages; short-term spending pressures could be suppressed through compensatory measures, such as a ceiling on allowances, emoluments and other non-wage payments, combined with the enforcement of natural decline in public sector staffing.

Structural measures in the medium term, based on a functional workforce review and deeper reforms in the civil service system, will be necessary once new human resources and information management systems are put in place .

Gray said reforms in the electricity sector were key to addressing poor service quality and cutting high electricity costs in the budget because of low tariff rates, chronic non-payment of electricity bills and poor maintenance .

On the support of public finance management, strengthening the legal framework, improving compliance and other control systems were key factors aimed at minimizing the misuse of public resources and restoring discipline in the budget .

In the financial sector, a strong plan to restructure large-scale public sector banks and the strengthening of bank controls was necessary to ensure financial stability and would help promote financial development and financial coverage.

The strengthening of AML / CFT controls and the strengthening of supervision would help Iraq prevent the misuse of the Iraqi financial sector for the purpose of harvesting criminal proceeds from money laundering and terrorist financing .

He called on the IMF to address the weakness of governance and vulnerabilities that spread through corruption, which he considered a very important factor in achieving the goals described in the policies.

The Fund called for ensuring the independence and integrity of anti-corruption bodies, and the AML / CFT system should be activated to support anti-corruption efforts .

The IMF team will prepare a report, subject to approval by the Administration, and is tentatively scheduled for consideration by the Executive Board of the Fund in July 2019 .







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IMF Staff Completes 2019 Article IV Mission on Iraq Empty Iraq economy has 'opportunity' after war and recovering oil prices

Post by claud39 on Tue May 07, 2019 1:56 pm

[size=64]Iraq economy has 'opportunity' after war and recovering oil prices[/size]

Containing public sector wages is the key reform needed in Iraq, IMF says


 May 7, 2019 04:38 PM

IMF Staff Completes 2019 Article IV Mission on Iraq WEb-wo12-iraq-election

While war-torn Iraq has turned a page after battling ISIS and a recovery in oil prices from a three-year slump provides impetus to move forward, the country still needs to address economic challenges, according to the International Monetary Fund.
The near-term vulnerabilities in Iraq subsided last year with a build-up in central bank reserves but the postwar reconstruction is limited and control on spending will curtail the country’s economic growth markedly, said the IMF.
“The end of the war with ISIS and a rebound in oil prices provide an opportunity to rebuild the country and address long-standing socio-economic needs. However, the challenges to achieving these objectives are formidable,” said IMF’s Gavin Gray, who led a consultation to the Iraqi government. “Combating corruption is critical to promote the effectiveness of public institutions and to support private-sector investment and job creation.”
Fiscal deficits in the country are expected to rise over the medium-term and in absence of policy changes, it will be hard to sustain capital spending, the Washington-based lender said, following its annual assessment with Iraqi authorities. The country's tight control over spending, particularly wages, and phased measures to boost non-oil revenue, however, would allow to build fiscal buffers.

Non-oil growth is forecast to increase to 5.4 per cent in 2019. However, fiscal deficits will require financing that may crowd out the private sector or erode central bank reserves. In these circumstances, it would be hard to sustain capital spending, and growth would slow, Mr Gray added.
Iraqi President Barham Salih in February ratified the country’s $111.8 billion budget for 2019, its largest with a 27 per cent increase over 2018. The bill calls for a rise in spending of $24bn and a deficit of $22.6bn during the year.
Some politicians in Baghdad said the budget fails to deploy sufficient funds for reconstruction. The IMF has calculated that Iraq would need more than $88bn to rebuild areas devastated by the war against ISIS. Nearly half of the spending in 2019 will go towards public salaries including to the Kurdistan Region of Iraq, which lawmakers said could help ease tensions between Baghdad and Erbil.
“Policy changes and structural reforms, including to improve governance, are therefore essential to maintain medium-term sustainability and lay the foundations for inclusive growth,” Mr Gray said.
Fiscal policy should aim to scale up public investment gradually while building buffers, the IMF said. To make space for this, IMF has recommended budgetary savings of around 9 per cent of the country’s gross domestic product over the medium-term by controlling spending, particularly public sector wages, and phased measures to boost non-oil revenue. Setting ceilings on expenditure from the 2020 budget would strengthen the fiscal framework’s capacity to support higher capital spending and to adapt to oil price shocks.
Containing public sector wages is the key reform needed in Iraq, according to the IMF, along with policies to overhaul the electricity sector. “It would be important to ensure that the poor and most vulnerable are protected throughout this reform,” the lender said.
Within the financial sector, a robust plan to restructure large public banks coupled with enhanced supervision is essential to secure financial stability and will help promote financial development and inclusion, according to the IMF.
“Strengthening anti-money laundering and countering financing terrorism controls and oversight will help prevent Iraq’s financial sector from being misused for the laundering of criminal proceeds and terrorist financing.”

Updated: May 7, 2019 04:38 PM



https://www.thenational.ae/business/economy/iraq-economy-has-opportunity-after-war-and-recovering-oil-prices-1.858343






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IMF Staff Completes 2019 Article IV Mission on Iraq Empty IMF Article IV Annual Consultation

Post by claud39 on Tue May 07, 2019 9:35 pm

[size=47]IMF Article IV Annual Consultation[/size]






IMF Staff Completes 2019 Article IV Mission on Iraq Thumb-xhdpi








[size=39]Introduction[/size]


Article IV of the Articles of Agreement of the International Monetary Fund (IMF) states that the Fund "shall exercise strong supervision over the foreign exchange policies of the Member States". The same article states that "each Member State shall provide the Fund with the information necessary for such supervision and, at the request of the Fund, shall consult with the Fund on such policies". In practice, this monitoring includes an annual mission of the IMF in Luxembourg, during which many economic issues are addressed (macroeconomic situation, public finances, situation of the banking and financial sector ...).

[size=39]Annual consultation [/size]


The International Monetary Fund conducts an annual consultation with Luxembourg as provided for in Article IV of its Articles of Agreement, which states that the Fund "shall exercise firm supervision over the exchange rate policies of the Member States".

In practice, this consultation includes an annual mission from an IMF delegation to Luxembourg, where the IMF has discussions with key players in the public and private sectors. During these interviews, the economic and budgetary situation, the structural reforms and the financial sector situation are discussed. The Ministry of Finance is responsible for preparing this mission. At the end of each annual mission, the IMF issues a final declaration, which summarizes the preliminary findings.

After approval by the Executive Board of the IMF, the results of this annual mission are published in a country report which assesses the economic and financial situation of Luxembourg and includes, where appropriate, recommendations on economic policies, budgetary and / or financial.

[size=39]Latest closing statements[/size]







https://mfin.gouvernement.lu/dam-assets/dossiers/fmi-article-iv/documentation/Luxembourg-2019-Concluding-Statement-for-the-Article-IV-Mission-Final.pdf


https://gouvernement.lu/fr/dossiers.gouv_mfin%2Bfr%2Bdossiers%2B2018%2Bconsultation-annuelle-fmi-article-iv.html
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IMF Staff Completes 2019 Article IV Mission on Iraq Empty Surveillance by the IMF

Post by claud39 on Tue May 07, 2019 9:52 pm

TECHNICAL SHEEt


Surveillance by the IMF

March 23, 2016

The IMF monitors the international monetary system and follows the economic and financial policies of its 189 member countries. As part of this global and domestic 'surveillance', the IMF highlights potential risks to stability and advises on necessary policy adjustments. In this way, it helps the international monetary system to achieve its fundamental objective of supporting economic growth by facilitating the exchange of goods, services and capital between countries and by providing the necessary conditions for economic and financial stability.

Why is surveillance by the IMF important?

Surveillance is fundamental to detecting the risks that need to be addressed to support growth. In addition, in today's integrated world, where one country's policies generally affect many others, international cooperation is paramount. With the almost universal character conferred on it by its 189 member countries, the IMF facilitates this cooperation. Its oversight work has two fundamental components: bilateral surveillance, which is about assessing and advising each member country's policies, and multilateral surveillance, which is global in scope.

Consultations with member countries

IMF economists continuously monitor the economies of member countries and visit the country - usually once a year - for an exchange of views with the government and the central bank to assess the presence of risks to the economy. internal and global stability that would justify adjusting economic or financial policies. Their main objective is to identify risks that may affect domestic and international stability and to advocate possible adjustments to economic or financial policies. The talks focus on the exchange rate, monetary, fiscal and financial policies, as well as macroeconomic key structural reforms. IMF missions also meet other stakeholders,
Returning to headquarters, IMF staff submitted a report for consideration to the Executive Board , whose opinion was then forwarded to the national authorities, concluding the so-called Article IV consultation process. Surveillance activities have become more transparent in recent years. Today, almost all member countries agree to issue a press release summarizing the Council's views, as well as the IMF staff report and analysis. Many countries are also issuing a staff statement at the end of the mission.

Multilateral surveillance

The IMF also tracks global and regional economic trends and analyzes the spillover effects of the policies of its member states on the global economy. Its main instruments of multilateral surveillance are its regular publications: World Economic Outlook , World Financial Stability Report , and Public Financial Monitor . The World Economic Outlookprovide a comprehensive review of the global economy and its growth prospects, including the macroeconomic effects of the global financial turmoil. In addition, they assess the major potential global benefits and emphasize the cross-border implications of economic and financial policies in systemically important economies. The World Financial Stability Report assesses developments in global financial markets as well as imbalances and financial vulnerabilities that threaten stability. The Public Finance Monitor updates the medium-term budgetary projections and analyzes the evolution of the state of public finances.
The IMF also publishes Regional Economic Outlook Reports , which provide a more detailed analysis of five major regions of the world. It maintains close cooperation with other bodies, including the Group of Twenty Industrialized and Emerging Countries (G-20): since 2009, the IMF has supported its mutual evaluation process, aimed at strengthening international economic cooperation. The IMF's analysis aims to determine whether policies pursued by member countries are conducive to strong and balanced global growth. Since 2012, the IMF has published Pilot Reports on the External Sector, which analyze the external positions of systemically important economies in a global context. Twice a year, the IMF also draws up a comprehensive plan of action that brings together key findings and policy advice from the various multilateral surveillance reports and identifies avenues for reflection and action by the IMF and the IMF. its member countries.

Maintain the relevance of monitoring

Surveillance, in its present form, is provided for in Article IV of the IMF's Articles of Agreement, revised in the late 1970s following the collapse of the Bretton Woods fixed parity system. Under this article, member countries pledge to collaborate with the IMF and among themselves to promote stability. For its part, the IMF is responsible for monitoring (i) the international monetary system to ensure its effective functioning and (ii) the manner in which each Member State fulfills its obligations.
The IMF regularly reviews its surveillance activities. The 2011 Triennial Surveillance Review (RTS) highlighted progress made in addressing deficiencies in surveillance activities prior to the crisis, but also noted significant deficiencies. In particular, the IMF's surveillance mission was considered too fragmented, with risk assessment lacking in depth and not giving the necessary interest to interconnections and the effects of shock transmission. The 2011 RTS recommended improvements in six areas: interconnections, risk assessment, external stability, financial stability, ripple effect and legal framework.
As part of broader efforts to further improve surveillance, in July 2012, the Executive Board adopted a new decision on bilateral surveillance and multilateral surveillance (Decision on Integrated Monitoring) to strengthen the legal framework that underpins the monitoring mission and reviewed the first pilot report on the external sector . In September 2012, the Board approved a new strategy for financial supervisionsetting out concrete and prioritized steps to further strengthen financial sector oversight. These measures help to ensure that the IMF is better able to: address the impact of member countries' policies on international stability; follow more comprehensively the situation of the external sector of the member countries; establish a constructive and more effective dialogue with these countries; to safeguard in a better way the proper functioning of the international monetary system; and preserve international economic and financial stability.
The last RTS, completed in September 2014, builds on these reforms to define five operational priorities to strengthen surveillance: integration and deepening of risk and contagion analyzes; integration of macrofinancial supervision; increased attention to structural policies, including those related to the labor market; more informed and consistent advice; and a client-centered monitoring approach based on clear and frank dialogue. The Director-General's Action Plan for Strengthening Surveillance sets out concrete steps to move forward in these priority areas, including updating Advisory Note for Surveillance in Article IV Consultations. A review of the program The financial sector assessment was completed in September 2014. Action is being taken in consultation with the Board to strengthen oversight for each of these priority areas. Regular review of surveillance has moved to a five-year cycle and progress will be assessed in an interim review in 2017.


https://www.imf.org/external/np/exr/facts/fre/survf.htm


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