Work Program Aims to Get Growth Going Again

  • IMF proposes three-pronged approach—monetary, fiscal, structural—to spur growth
  • Focus to be on new and emerging issues along with longstanding areas for reform
  • Ongoing transitions in global economy call for strong global cooperation
  • This work program is in line with the directions laid out in the Global Policy Agenda and the International Monetary and Financial Committee communiqué released in April.

    The work program highlights the IMF’s activities to support the three-pronged approach of monetary, fiscal, and structural actions to boost growth. It also lays out work to help member countries address emerging issues (such as climate change and inequality) and strengthen the international monetary system.

    “The global economy has been impaired by growth that has been too slow for too long,” said IMF Managing Director Christine Lagarde in a statement to the IMF Executive Board.

    Addressing policy challenges

    Against the backdrop of weaker global growth, the work program aims to help countries achieve a more balanced and potent policy mix.

    Monetary policy. The IMF will continue to study the implications of unconventional monetary policies and their spillovers to other economies, particularly emerging markets. A related area of focus is capital flow management. Over the coming year, the Fund will review member country experience in dealing with capital flows in recent years, with a view to getting a clearer picture of the associated macroeconomic and financial stability risks.

    Financial sector surveillance. The IMF’s efforts to deepen macrofinancial analysis will also intensify, as will work on strengthening members’ supervisory and regulatory frameworks. The IMF will take stock of progress on global and regional financial regulatory reforms in light of the increased risks to global financial stability. The agenda also includes several items related to managing financial sector vulnerabilities and reducing risk. In particular, the IMF will analyze the existing evidence on the drivers and consequences of the trends in correspondent banking relationships and discuss the role that the Fund can play.

    Fiscal policy. The work program notes that fiscal policy needs to do more in some countries, as monetary policy cannot bear the entire burden of responding to current challenges. Fiscal policy can play a bigger role in supporting demand, in countries where fiscal space exists. The IMF will work on a set of considerations for how to assess fiscal space...

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