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International Monetary Fund. Statistics Dept.
At the request of the National Institute of Statistics and Censuses (INDEC), a technical-assistance mission on external-sector statistics (ESS) visited Buenos Aires on November 14–25, 2016. Currently, INDEC’s National Directorate for International Accounts (DNCI) compiles and disseminates ESS following the guidelines of the fifth edition of the Balance of Payments Manual. The mission reviewed the ESS methodology, data sources, and dissemination policy in order to help enhance its quality and to assist compilers in migrating the methodology to the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6). The main data sources used to compile the current account and the capital account (excluding investment income, which is compiled along with the financial account and the IIP) are customs records, corporate surveys, the international-tourism survey, accounting information available to the public, administrative records, and information concerning the exchange balance disseminated by the Central Bank of Argentina (BCRA). The mission found data sources and compilation procedures to be sound. Although the mission identified improvements that could add to the quality of certain estimates, the balances of the current and capital accounts are expected to remain substantially unchanged.
Venkat Josyula


This third edition of the Coordinated Portfolio Investment Survey Guide has been prepared to assist economies that participate or are preparing to participate in the Coordinated Portfolio Investment Survey (CPIS). It builds on and updates the second edition of the CPIS Guide (2002) to reflect the adoption of the Balance of Payments and International Investment Position Manual, sixth edition (BPM6) as the standard framework for compiling cross-border position statistics.

Mr. Adrian Alter and Selim Elekdag
Corporate debt in emerging markets has risen significantly in recent years amid accommodative global financial conditions. This paper studies the relationship of leverage growth in emerging market (EM) firms to U.S. monetary conditions, and more broadly, to global financial conditions. We find that accommodative U.S. monetary conditions are reliably associated with faster EM leverage growth during the past decade. Specifically, a 1 percentage point decline in the U.S. policy rate corresponds to an appreciable increase in EM leverage growth of 9 basis points, on average (relative to the sample average leverage growth of 35 basis points per year). This impact is more pronounced for sectors dependent on external financing, for SMEs, and for firms in more financially open EMs with less flexible exchange rates. The findings suggest that global financial conditions affect EM firms’ leverage growth in part by influencing domestic interest rates and by relaxing corporate borrowing constraints.
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses Morocco’s Ex Post Evaluation of Exceptional Access Under the 2012 Precautionary and Liquidity Line (PLL) Arrangement. The Ex Post Evaluation confirms that the 2012–14 PLL arrangement was consistent with the PLL qualification standards and requirements under the exceptional access policy at the time of the PLL arrangement request in August 2012 and at the subsequent reviews. The authorities’ policies helped maintain macroeconomic stability and reduce fiscal and external vulnerabilities, despite unfavorable external developments. It is observed that despite the significant macroeconomic achievements under the 2012–14 PLL arrangement, a number of policy challenges remained to be fully addressed.
International Monetary Fund. European Dept.
This Selected Issues paper assesses the youth unemployment problem in advanced European economies, especially the euro area. Youth unemployment rates increased sharply in the euro area after the crisis. Much of these increases can be explained by output dynamics and the greater sensitivity of youth unemployment to economic activity compared with adult unemployment. Labor market institutions also play an important role, especially the tax wedge, minimum wages, and spending on active labor market policies. The paper highlights that policies to address youth unemployment should be comprehensive and country specific, focusing on reviving growth and implementing structural reforms.
Mr. Hui Tong, Shang-Jin Wei, and Mr. Tamim Bayoumi
China’s high corporate savings rate is commonly claimed to be a key driver for the country’s large current account surplus. The mainstream explanation for high corporate savings is a combination of windfall profits in state-owned firms, especially in resource sectors, and mis-governance of state-owned firms represented by their low dividend payout. The paper casts doubt on these views by comparing the savings of 1557 Chinese listed firms with those of 29330 listed firms from 51 other countries over 2002-07. First, Chinese firms do not have a significantly higher savings rate (as a share of total assets) than the global average because corporations in most countries have a high savings rate. The rising corporate savings rate is also consistent with a global trend. Second, there is no significant difference in the savings behavior and dividend patterns between Chinese majority state-owned and private listed firms, contrary to the received wisdom.
Mrs. Hanan Morsy, Maria Pia Iannariello, and Akiko Terada-Hagiwara
This paper studies the detrimental effect of sudden stops on the growth of Thai firms' fixed assets. We focus on the fixed assets adjustment that firms undertake at times of financial constraints. We derive our results from balance sheet data for 284 nonfinancial Thai listed firms. Our data demonstrate that Thai firms faced severe declines in the growth of their fixed assets starting in 1996. Regression results demonstrate, after controlling for firms' characteristics and lagged dependent variables, that holding longer-term debt maturity structure is the factor that works in the firms' favor during sudden stop episodes, while it is their profitability that matters during tranquil periods.
International Monetary Fund
This Selected Issues paper analyzes whether cyclical factors, including the large real exchange rate appreciation in recent years in New Zealand, can account for the rapidity of the recent rise in import penetration, or whether more lasting structural changes, such as the effects of globalization, may have played a role. The paper also looks at New Zealand’s vulnerabilities from two angles. It evaluates the external position of the country, and then assesses the health and soundness of various sectors of the economy by looking at their balance sheets and the key vulnerability indicators.
Mr. Milan M Cuc, Mr. Erik J. Lundback, and Mr. Edgardo Ruggiero


Labor migration and remittances, which have increasingly become a part of the global landscape, have profound economic and social consequences. Moldova, a small low-income country where an estimated one-third of the economically active population has been working abroad, is an interesting illustration of this trend. Drawing on household survey data, this Special Issues paper explains why Moldovan workers go abroad and how their remittances are used. With this background, it provides insights into policy challenges of coping with, and maximizing benefits from, international labor mobility and the large inflows of remittances.