Assessing Sustainability

60 Pages·2002·0.88 MB·English

INTERNATIONAL MONETARY FUND

Assessing Sustainability

Prepared by the Policy Development and Review Department

In consultation with the Fiscal Affairs, International Capital Markets,
Monetary and Exchange Affairs, and Research Departments

Approved by Timothy Geithner

May 28, 2002

Contents Page
I. Introduction..............................................................................................................................3
II. Analytical Background.............................................................................................................4
III. Existing Work in the Fund.......................................................................................................7
A. External Sustainability..................................................................................................7
Medium-term current account and balance of payments projections.......................8
Current account and exchange rate assessments..................................................12
B. Fiscal Sustainability....................................................................................................13
Fiscal indicators .................................................................................................13
Medium-term fiscal projections...........................................................................16
C. Financial Sector Stability............................................................................................23
D. Conclusions...............................................................................................................25
IV. A Proposed Framework ......................................................................................................25
V. Conclusions and Next Steps ..................................................................................................39

Text Tables
1. Medium-Term Frameworks—BOP Information in Board Documents for the EMBI
Global Emerging Market Countries........................................................................................9
2. Medium-Term Frameworks—Fiscal Information in Board Documents for the EMBI
Global Emerging Market Countries......................................................................................16
3. External Sustainability Framework........................................................................................28
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