Communiqué of the Twenty-Fifth Meeting of the IMFCPress Release No. 12/145
April 21, 2012
Chaired by Mr. Tharman Shanmugaratnam, Deputy Prime Minister of Singapore and Minister for Finance
The global economy is recovering gradually. Since we last met, important policy actions have been taken in the euro area, both at the national and regional levels, including through an enhancement of the European firewall. Economic indicators in the United States have improved. Emerging market and developing countries on the whole remain a source of strength for the world economy. But more remains to be done. The outlook remains one of moderate growth globally, and risks remain high. We will continue to act collectively to restore confidence, rekindle growth, and create jobs.
- In advanced economies, further actions are
needed in many countries to achieve credible fiscal consolidation and
government debt reduction, while avoiding excessively contractionary
fiscal policies. Where conditions permit, automatic fiscal stabilizers
should be allowed to operate. In all countries, viable medium-term
consolidation strategies should be in place. Monetary policy will need
to remain accommodative as long as inflation prospects remain anchored
and weak growth persists. The potential impact and cross-border
spillovers of such a policy should be closely monitored. Structural
reforms to boost potential output and employment are critical, and need
further momentum. In the euro area, continued progress on ensuring debt
sustainability, securing financial stability, and undertaking bold
structural reforms will be crucial to boosting confidence and
productivity, facilitating rebalancing within the monetary union, and
promoting strong and balanced growth.
- Emerging market and developing countries
continue to grow, while facing spillovers from the advanced economies.
Ongoing stresses in Europe, high and volatile oil and commodity prices,
and large and volatile capital flows pose significant policy challenges.
This requires the right balance between attenuating downside risks with
appropriate policies to support growth and curbing inflationary
pressures. Rapid credit growth in some economies warrants attention.
Low-income countries should preserve macroeconomic stability and debt
sustainability while pursuing their development objectives and
addressing infrastructure gaps to enhance their growth potential. We
call on the membership to complete the low-income-country financing
package under the Poverty Reduction and Growth Trust through 2014–15,
and will consider proposals to ensure its long-term sustainability, by
our 2012 Annual Meetings. We call on the Fund to support the efforts of
Arab countries in transition with policy advice, technical assistance,
and appropriate financing at this historic time; we support these
efforts, including through collaboration with the Deauville Partnership,
to facilitate economic transition while safeguarding financial
stability. We encourage the Fund to enhance attention to small states,
especially those that are most vulnerable to external shocks.
- Global collaboration is key to sustaining
growth everywhere and ensuring stability. Further actions are needed to
build on the progress made to date in reducing global imbalances. In
general, deficit countries need to continue with their efforts to
strengthen national saving while enhancing export competitiveness, and
surplus countries need to continue to implement structural reforms to
strengthen domestic demand, supported by continued efforts that achieve
greater exchange rate flexibility. It is also crucial to press ahead
cooperatively in strengthening financial systems by completing and
implementing the agreed international financial reform agenda in an
internationally consistent and non-discriminatory manner, including in
the area of Basel standards, derivatives, and cross-border resolution of
financial institutions. In addition, fostering and protecting investment
is crucial for the global recovery. We reaffirm our collective
responsibility to avoid protectionism in all its forms.
The next Consolidated Multilateral Surveillance Report provides an opportunity to assess progress in our efforts.
We will ensure that the IMF has the tools and resources to effectively support the membership and welcome the directions in the Managing Director’s Action Plan.
- Resources. We remain committed to take the
necessary actions to secure global financial stability. We welcome the
euro area members’ decisions in March to strengthen European firewalls
as part of broader reform efforts and the availability of central bank
swap lines. Together with the G-20, we have reached agreement to enhance
IMF resources for crisis prevention and resolution. This is the result
of a broad international cooperative effort that includes a significant
number of countries. There are firm commitments to increase resources
made available to the IMF by over $430 billion in addition to the quota
increase under the 2010 reform. These resources will be available for
the whole membership of the IMF, and not earmarked for any particular
region. The resources would be channelled through temporary bilateral
loans and note purchase agreements to the IMF’s General Resources
Account. Should it become necessary to use these resources, adequate
risk mitigation features, conditionality, and adequate burden sharing
among official creditors would apply, as approved by the IMF Board. This
effort, together with the national and regional structural, fiscal, and
monetary actions that have been put in place in the past months, shows
the commitment of the international community to safeguard global
financial stability and put the global economic recovery on a sounder
- Governance. We reaffirm the urgency of
making the 2010 quota and governance reforms effective by the 2012
Annual Meetings, to enhance the Fund’s legitimacy and credibility. We
urge members to ratify these reforms expeditiously and call on the Fund
to monitor progress transparently and more frequently. We look forward
to an agreement, by January 2013, on a simple and transparent quota
formula that better reflects members’ relative positions in the world
economy. We reaffirm our commitment to complete the Fifteenth General
Review of Quotas by January 2014. Any realignment is expected to result
in increases in the quota shares of dynamic economies in line with their
relative positions in the world economy, and hence likely in the share
of emerging market and developing countries as a whole. Steps shall be
taken to protect the voice and representation of the poorest members. We
call on the Fund with the input from our Deputies to report on progress
at our next meeting.
- Surveillance. We welcome recent initiatives on Fund surveillance, and agree that the current surveillance framework should be significantly enhanced. We welcome the progress by the Fund in advancing consideration of an integrated surveillance decision and commit to support the decision process. Strengthening surveillance should bring together bilateral and multilateral perspectives in Fund policy advice and enable better assessment of global and country level risks and spillovers to economic and financial stability, and engage more effectively with policymakers. The IMFC has a key role to play in regularly guiding strategic and operational priorities for Fund surveillance.
The next Action Plan provides an opportunity to report on progress.
Next IMFC meeting. Our next meeting will be held in Tokyo on October 12–13, 2012.
Attendance can be found at http://www.imf.org/external/spring/2012/imfc/attendees/index.htm