The past year was “a deeply challenging one for many IMF members and for the Fund itself,” notes IMF Managing Director Christine Lagarde in the IMF’s 2012 Annual Report, which was released yesterday.
In her opening message for Annual Report 2012: Working Together to Support Global Recovery, Lagarde emphasizes that the IMF “must continue to apply all of its analytical essence and forward-thinking creativity to help its members overcome current problems and build a bridge” to a better world.
The report highlights the IMF’s work during financial year 2012, which covers the period from May 1, 2011, through April 30, 2012, and focuses on the core areas of IMF activity: Assessing the economic and financial policies of member countries, providing financing to member countries, and reinforcing their technical capacities.
Major steps were taken during the year to improve the methods and outputs associated with the IMF’s oversight of member countries’ economic and financial policies (a core IMF responsibility known as “surveillance”), according to the report.
The Fund concluded its comprehensive triennial review of surveillance activities, concurring with an action plan to strengthen surveillance in the areas of interconnections, risk assessments, financial stability, external stability, the legal framework, and policy traction.
An analysis of global external spillovers from the five largest economies was conducted for the first time, and a new Consolidated Multilateral Surveillance Report was issued.
Demand for IMF resources continued to be strong in 2012, the report notes, though the pace of increase slowed relative to 2011.
During the year, the IMF approved 24 new or augmented financing arrangements totaling $ 54.5 billion, with 17 of those going to low-income countries eligible for support from the Fund’s Poverty Reduction and Growth Trust.
IMF members made commitments to boost the organization’s financing resources by $ 430 billion during the year (with an additional $ 26 billion pledged since the end of 2012), and they contributed additional funds for subsidizing financing to low-income members. Furthermore, as part of ongoing efforts to ensure that the IMF’s financing toolkit remains responsive to members’ needs, a new Precautionary and Liquidity Line was introduced, replacing the existing Precautionary Credit Line.
In the area of technical assistance, efforts during the year were focused on helping countries manage the implications of weak world growth, turbulence in Europe, and continued volatility in financial markets, the report notes.
Demand remained heavy during the year: more than 60 percent of the year’s technical assistance was provided to low- and lower-middle-income countries, while demand also increased among upper-middle-income countries as a result of the ongoing crisis.
Africa continued to be the largest recipient of technical assistance, accounting for almost 40 percent of the total provided.