In its oversight of member countries’ economic policies, the IMF looks mainly at the performance of an economy as a whole—often referred to as its macroeconomic performance. This comprises total spending (and its major components like consumer spending and business investment), output, employment, and inflation, as well as the country’s balance of payments—that is, the balance of a country’s transactions with the rest of the world.

The IMF focuses mainly on a country’s macroeconomic policies—that is, policies relating to the government’s budget, the management of interest rates, money, and credit, and the exchange rate—and financial sector policies, including the regulation and supervision of banks and other financial institutions. In addition, the IMF pays due attention to structural policies that affect macroeconomic performance—including labour market policies that affect employment and wage behaviour.

The IMF advises each member on how its policies in these areas may be improved to allow the more effective pursuit of goals such as high employment, low inflation, and sustainable economic growth—that is, growth that can be sustained without leading to such difficulties as inflation and balance of payments problems.

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