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Friday, July 19, 2024

What is IMF – IMF Chief Economist – What Is the work of IMF?

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Introduction to IMF

IMF, also known as the International Monetary Fund is a 190-country global economic agency located in Washington, D.C. Its declared aim is to “seek to enhance worldwide fiscal collaboration, ensure economic peace, enable international commerce, encourage maximum job opportunities and steady monetary progress, and eradicate worldwide poverty.” 

IMF came into official reality in 1945 with 29 participating nations with the purpose of recreating the global financial framework. It currently fulfills a critical purpose in managing transaction imbalances and worldwide economic problems.

What is IMF - IMF Chief Economist

The IMF seeks to strengthen the economics of its participating nations via the funds as well as other operations like data collection and research, monitoring of its nations’ economic systems, and advocacy for specific measures.

The Articles of Agreement declare that the organization’s goals are to encourage global economic solidarity, global commerce, job growth, exchange-rate consistency, sustained economic development, and to make funds accessible to participating nations in economic difficulties. 

IMF funding is derived primarily from 2 channels: quotas and loans. The majority of IMF funding is generated via quotas that are collected contributions from participating countries.

The proportion of a nation’s quota is determined by its global financial weight. Quotas are higher for countries with greater economic weight. The quotas are raised on a regular basis to supplement the IMF’s funds in the nature of special borrowing privileges.

Chief Economist of IMF

The Chief Economist of the IMF is also the Economic Counsellor and Research Department Director and is accountable for supplying autonomous recommendations to the financing of its policy matters, incorporating empirical suggestions into strategic planning, communicating such recommendations to decision makers within it and beyond the financing, and organizing all research done at the IMF. The IMF’s Chief Economist is a part of the IMF’s Executive Management.

The position is among the more distinguished in the discipline and has previously been held by the most notable scholarly experts in global finance. The Chief Economist is a member of the senior leadership, actively consults the MD, and supervises around 100 Ph.D. analysts in the Research Division.

The Research Division releases a variety of studies, especially the extensively followed annual World Economic Outlook; conducts seminars, notably the Annual Research Conference that draws up leading scientists and regulators; and releases the peer-reviewed publication IMF Economic Review.

Working of IMF

Per the IMF, it seeks to promote world development and financial sustainability by offering economic recommendations and finance to its participant nations while also assisting underdeveloped nations in achieving macroeconomic stabilization and reducing economic inequality.

This is because privatized global commercial markets are flawed, and many nations have restricted exposure to economic markets.

Such economic inefficiencies, in conjunction with balance-of-payments finance, give the rationale for public funding, in absence of which many nations would only be able to fix major external payments deficits via actions with negative financial impact.

The IMF offers other funding options, such as the Poverty Reduction and Growth Facility.

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