Thread by @Brad_Setser

The IMF needs to perform hard-hitting surveillance of surplus economies – and not just treat balance of payments surplus as a sign of virtue.

The Fund did a very good job of this in its latest report on Germany.

But not in its report on Singapore.

imf.org/en/Publication…

Singapore’s intervention in 2018 likely was about equal to its (massive) current account surplus. But hardly a peep from the IMF …

No real complaint about excessive intervention

This all the IMF said about Singapore's actual intervention , best I can tell –

And no serious pressure to disclose the GIC’s assets so as to provide more clarity about the size of past transfers of fx reserves off the balances sheet of the monetary authority

And on tax? The IMF treated Singapore’s income deficit as a puzzle – not as evidence of its role as a tax center (The goal of transfer pricing is to book large sales in a jurisdiction like Singapore, and then transfer to profit to a no-tax jurisdiction in the Caribbean … )

Fiscal policy is clearly too tight (in part because of limits on how much of its offshore income Singapore can spend). The IMF though is fairly restrained in its criticism of a country with substantially higher revenues than spending ...

The Fund still treats Singapore as a model that should be emulated --

Not as a country whose policy choices have encouraged corporate tax competition and provided a model for how to generate excessive and sustained BoP surpluses through tight fiscal and fx intervention

Worth contrasting the Fund's hard hitting report on Germany (with its emphasis on reversing the fall in household income v GDP) to its report on Singapore ...

imf.org/en/Publication…