Through surveillance, the IMF monitors the international monetary system and global economic developments and engages in a health check of the economic and financial policies of its 190 member countries. In addition, the IMF highlights possible stability risks to its member countries and advises their governments on potential policy adjustments, enabling the international monetary system to achieve its goal of facilitating the exchange of goods, services, and capital among countries, thereby sustaining sound economic growth. The IMF advises on the policies of each member country through “bilateral surveillance” and provides analysis of the international monetary system and global and regional economic developments through “multilateral surveillance.” In practice, these two aspects of surveillance inform one another, ensuring a more comprehensive, consistent analysis of “spillovers”—how one country’s policies affect other countries.
Bilateral surveillance
Article IV consultations consist of a two-way policy dialogue between the IMF and country authorities and cover a range of important macro-critical issues: financial, fiscal, foreign exchange, monetary, and structural. Because of the unprecedented demand for financing and support at the onset of the COVID-19 crisis, the IMF’s work priorities had to be shifted, its procedures streamlined, and its staff redeployed. Staff work on Article IV consultations and the FSAP-the main vehicles for bilateral surveillance-was temporarily put on hold as a result, and consultation cycles were extended to ensure the postponement had no impact on IMF members’ surveillance obligations.
Article IV consultations and assessments under the FSAP have since resumed remotely, but because of the pandemic, the IMF conducted only 36 Article IV consultations in FY 2021 (see Web Table 2)-less than half the usual number of consultations held annually-and eight Financial System Stability Assessments under the FSAP.
Follow-up work as part of the 2021 Comprehensive Surveillance Review will help strengthen systemic financial risk analysis and macroprudential policy advice in Article IV consultations, as bilateral surveillance ramps up.
The 2021 Comprehensive Surveillance Review
Work on the 2021 Comprehensive Surveillance Review was underway during FY 2021 (and was completed in May 2021, after this report was finalized). This review aims to strengthen IMF surveillance to help countries navigate the challenges of the next decade by better integrating aspects of the IMF’s work into surveillance, from macro-financial analysis to climate to capacity development. The IMF will also draw on new technologies, data, and partnerships to support more timely, more focused, and better-informed policy advice.
Multilateral surveillance
As part of its multilateral surveillance, the IMF issues biannual reports and updates on the latest global economic developments: the World Economic Outlook, the Global Financial Stability Report, and the Fiscal Monitor. Interim updates are also provided when warranted. In addition, as part of an ongoing effort to provide a rigorous and candid assessment of global excess imbalances and their causes, the External Sector Report is published annually. Article IV consultations and Financial System Stability Assessments under the FSAP also discuss issues related to multilateral surveillance, where relevant.
Policy advice
The IMF Executive Board discusses all aspects of the IMF’s work, from Article IV consultations to policy issues relevant to the global economy. The Board carries out its work largely on the basis of policy papers prepared by IMF management and staff. In FY 2021, the IMF published 54 of these policy papers externally. For a comprehensive list of IMF policy papers and other publications issued in FY2021, please visit the Annual Report website.
