The Acting Chair’s Summing Up Review of Data Provision to the Fund for Surveillance Purposes Executive Board Meeting 22/25, March 14, 2022

Executive Directors welcomed the opportunity to take stock of the experience with Data Provision to the Fund for Surveillance Purposes since the last review completed in 2012. They also considered proposals for expanding the perimeter of mandatory data provision, introducing a more structured and transparent assessment of data adequacy for surveillance, and addressing outdated data requirements.

Directors agreed that the data provision framework under Article VIII, Section 5, of the Articles of Agreement has fostered close collaboration between the Fund and its members, promoting the production of key macroeconomic data since the last review, including through capacity development activities. They welcomed that virtually all Fund members continued to provide to the Fund most required indicators, even during the pandemic. Directors also appreciated that Fund members generally provide far more data to the Fund than required under the mandatory framework.

Directors agreed that adapting the perimeter of mandatory data provision to the evolving global economy is crucial for keeping Fund surveillance effective, considering that the list of mandatory data series was last updated in 2004. Drawing on the priorities identified in the 2021 Comprehensive Surveillance Review, Directors agreed on the need to update the overall envelope of data provision in the areas of public sector and macrofinancial indicators. They also broadly supported requiring more data on foreign exchange interventions, while seeking greater clarifications, with many Directors expressing reservations and asking for more flexibility. Directors welcomed that most Fund members already provide indicators in these three areas voluntarily and considered that addressing the remaining data needs in the mandatory framework would ensure an evenhanded and more effective surveillance and improve the Fund’s policy advice.

Directors broadly agreed with the proposal to expand the mandatory provision of public sector data as proposed in the staff paper, although some specific reservations were raised. Some Directors indicated that they need more time to verify the feasibility of providing some of the proposed public sector data given domestic standards and legal constraints. A few Directors asked for more flexibility in the scope of general government, taking country-specific circumstances into account. A few other Directors had reservations about making mandatory the provision of data on non-financial public corporations.

Directors agreed with the proposal to expand macrofinancial data requirements for all member countries, as proposed in the staff paper. They generally agreed that members designated as having systemically important financial sectors should provide to the Fund a larger set of macrofinancial indicators, as also outlined in the staff paper.

While many Directors agreed with the proposal to expand the mandatory provision of data on foreign exchange interventions and some other central bank transactions, as outlined in the staff paper, many other Directors expressed reservations. Most Directors noted that these data can be market sensitive; and a number of Directors considered that disclosing this information, including due to any leakage or data breach, could undermine the authorities’ policy implementation. In this context, Directors agreed on the need for the utmost caution to preserve data confidentiality when members so desire and for having in place adequate safeguards to protect data confidentiality. A few Directors recommended reducing the frequency of data provision and increasing the reporting lag, while a few others preferred using a narrow definition for data on foreign exchange interventions. Some Directors favored relying on a voluntary approach for the provision of these data. A few Directors considered that the provision of data on the use of swap and repo transactions among central banks should not be required.

Many Directors agreed with the transition periods outlined in the staff paper for introducing the proposed new requirements, which should help Fund members tackle competing priorities. Many other Directors, however, stressed the need for flexibility and longer transition periods, noting domestic institutional and legal constraints and limitations imposed by the pandemic.

Directors agreed that effective surveillance requires a more structured and transparent assessment of data adequacy for surveillance. Accordingly, they endorsed the introduction of a new, principles-based approach, noting that this strengthened framework will facilitate policy dialogue with the authorities and improve prioritization of capacity development efforts by more clearly identifying areas where data need to be improved.

Directors reiterated that periodicity and timeliness of data provision should remain guided by the Fund’s surveillance needs. They noted that the current framework, where information can be provided according to country-specific understandings between staff and the authorities, is geared toward supporting bilateral and multilateral surveillance. Directors agreed that in the absence of country-specific understandings, general understandings drawn from internationally accepted practices, including the IMF Data Standards Initiatives, should be used. They also reiterated that under certain conditions, the data provision framework allows for flexibility on the specific definitions of indicators, considering that member-specific circumstances, including capacity constraints, can make alternative definitions appropriate.

Directors agreed that some of the minimum required indicators listed under Article VIII, Section 5, of the Articles of Agreement and specified in Annex III of the staff paper have become outdated, owing to methodological improvements and longer-term trends in the global economy. While recognizing that an amendment to the Articles could help modernize the data provision framework, Directors agreed to maintain the Fund’s long-standing practice of not applying the existing remedial framework to members not providing the data required under Article VIII, Section 5 that the Fund considers outdated.

Directors underscored the importance of taking careful account of country capacity and the constraints imposed by the pandemic when further refining the proposed reforms. They also emphasized the importance of continued outreach to Fund members, including provision of tailored capacity development assistance to those countries where data provision capacity is constrained. Directors stressed the need for continued collaboration on data and statistics with other international organizations. Noting that the review would not expand the perimeter of required data to sustainability indicators, Directors recommended working with other international organizations to gather data on climate change, inequality, and digitalization.

In sum, Directors agreed with the new principles-based approach for assessing data adequacy for surveillance, the approach to outdated macroeconomic indicators, and the enhanced data provision of macrofinancial indicators. At the same time, they concurred on the need to iron out with their national authorities the remaining specific issues in the proposals on data on public sector, foreign exchange interventions, and central bank swaps and repos. Accordingly, Directors agreed to return as soon as possible to the data provision policy to conclude the review.

SU/22/40

March 18, 2022