Policy Papers

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2015

April 20, 2015

Fiscal Policy and Long-Term Growth

Description: This paper explores how fiscal policy can affect medium- to long-term growth. It identifies the main channels through which fiscal policy can influence growth and distills practical lessons for policymakers. The particular mix of policy measures, however, will depend on country-specific conditions, capacities, and preferences. The paper draws on the Fund’s extensive technical assistance on fiscal reforms as well as several analytical studies, including a novel approach for country studies, a statistical analysis of growth accelerations following fiscal reforms, and simulations of an endogenous growth model.

April 16, 2015

Progress Report on the Activities of the Independent Evaluation Office

Description: This progress report presents key conclusions and recommendations from an IEO evaluation of the IMF’s response to the global financial and economic crisis and an update of the IEO evaluation of the IMF’s approach to capital account liberalization, both issued since October 2014. It also describes ongoing IEO activities.

April 15, 2015

Managing Director’s Statement to the International Monetary and Financial Committee on Financing Sustainable Development—Key Policy Issues and the Role of the Fund

Description: 2015 is a pivotal year—a year when the international community will commit to a shared vision on goals for international development through 2030 and beyond. Achieving these Sustainable Development Goals (SDGs) will require a partnership among advanced, emerging, and developing economies, and international institutions to ensure that the required policies are put in place and that sufficient private and public resources are mobilized.
The Fund, with its global membership and mandate at both the national and multilateral levels, is uniquely positioned to contribute to this compact and help implement it. As new deliverables, the IMF is considering:

1. Boosting the access to IMF resources provided to developing countries, better positioning them to handle balance of payments needs as they pursue growth;
2. Expanding diagnostic and capacity-building support for countries seeking to scale up investment to tackle infrastructure gaps;
3. Sharpening the focus of operational work on equity, inclusion, and gender, drawing on ongoing analysis and work of other institutions;
4. Increasing the focus on and resourcing of work on fragile/conflict-affected states;
5. Selective expansion of capacity-building efforts in the areas

Full text is also available in French and Spanish.

April 13, 2015

Managing Director's Global Policy Agenda to the International Monetary and Financial Committee: Confront Global Challenges Together

Description: Against a backdrop of declining oil prices, sharp variations in exchange rates, and market volatility, global growth remains uneven. The prospect of a new mediocre lingers as medium-term forecasts have been marked down since the last GPA.
Promoting balanced, sustained growth requires an integrated policy package that bolsters today’s actual and tomorrow’s potential output, diminishes risks, and confronts emerging global challenges.

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The Executive Summary is also available in:
Arabic , Chinese, French, Japanese, Russian, and Spanish.

April 10, 2015

The Consolidated Medium-Term Income and Expenditure Framework

Description: The medium-term income projections have been updated since the last estimate provided to the Executive Board in April 2014. The main changes to the outlook stem from a lower path for credit outstanding and expectations for a more gradual rise in interest rates.

The revised projections show lower levels of net operational income over the coming years. Lending income is lower compared with earlier estimates as a result of lower credit levels, including the advance repurchases by Ireland and Portugal. Non-lending income is also projected to be lower reflecting a further downward shift in SDR interest rates and, thus, returns on investments and interest-free resources. The updated expenditure path assumes the net administrative budget remains constant in real terms at the FY 2012 level. The long-run projections indicate a broad balance between income and expenditures, assuming that interest rates rise to 3.5 percent and with lending returning to pre-crisis levels.

The pace of reserve accumulation is expected to slow, reflecting the decline in Fund credit, and precautionary balances are now projected to remain slightly below the projected target of SDR 20 billion over the medium term compared with the earlier estimates.

April 10, 2015

Group of Twenty - Measures Which are Both Macroprudential and Capital Flow Management Measures: IMF Approach

Description: The global financial crisis underscored the costs of systemic instability at both the national and global levels and highlighted the importance of dedicated macroprudential and capital flow management policies. The IMF has been assisting its members with policy advice as well as developing and making operational their policy frameworks. Multilateral aspects of both policies need to be fully considered, including the interaction with other domestic and international legal frameworks. To the extent that capital flows are the source of systemic financial sector risks, the tools used to address those risks can be seen as both capital flow management measures (CFMs) and macroprudential measures (MPMs).

April 9, 2015

Provisional Agenda for the Thirty-First Meeting of the IMFC

Description: The following is the provisional agenda for the Thirty-First Meeting of the International Monetary and Financial Committee, which is to be convened at the IMF's Headquarters in Washington, D.C. on April 17, 2015.

April 9, 2015

The Fund's Lending Framework and Sovereign Debt-Further Considerations

Description: In discussing the June 2014 paper, Executive Directors broadly supported staff’s proposal to introduce more flexibility into the Fund’s exceptional access framework to reduce unnecessary costs for the member, its creditors, and the overall system. Directors’ views varied on staff’s proposal to eliminate the systemic exemption introduced in 2010. Many Directors favored removing the exemption but some others preferred to retain it and requested staff to consult further with relevant stakeholders on possible approaches to managing contagion. This paper offers specific proposals on how the Fund’s policy framework could be changed, presents staff’s analysis on the specific issue of managing contagion, and addresses some implementation issues. No Board decision is proposed at this stage. The paper is consistent with the Executive Board’s May 2013 endorsement of a work program focused on strengthening market-based approaches to resolving sovereign debt crises.

April 8, 2015

Ninth Review of the International Monetary Fund’s Data Standards Initiatives

Description: The International Monetary Fund’s Executive Board regularly reviews progress and developments under the Data Standards Initiatives. The last review—Eighth Review—undertaken in February 2012 introduced the Special Data Dissemination Standard (SDDS) Plus.

In light of the long experience under the Data Standards Initiatives established in the mid-1990s, this review takes a longer term retrospective on what has been achieved so far, and highlights some of the lessons learned. What is evident is the contrast between the progress of countries with more advanced dissemination practices (SDDS and SDDS Plus), and the slow pace of improvement under the General Data Dissemination System (GDDS).

April 6, 2015

Review of the Fund's Income Position for FY 2015 and FY 2016

Description: FY 2015 net income is now projected at SDR 1.5 billion. Lending continues to be the main source of income, although advance repurchases have lowered projected lending income in FY 2015 by SDR 0.3 billion. Investment income remains constrained in the low interest environment but the returns were somewhat stronger than projected. A revaluation of pension obligations, required under accounting standard IAS 19 and stemming from a further fall in the discount rate, is projected to entail an adjustment to FY 2015 net income of about SDR 0.8 billion.

The paper proposes that GRA net income of SDR 1.3 billion, which excludes the retained earnings of the gold endowment, be placed to the special reserve.* After the placement to reserves, precautionary balances are projected at SDR 14.0 billion at the end of FY 2015.

The paper further proposes to retain currencies available for transfer to the Investment Account in the GRA, pending completion later this year of the Board’s review of the mandate for the Fixed-Income Subaccount.

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