Update on the Joint IMF-WB Multipronged Approach to Address Debt Vulnerabilities

Policy Papers, December 14, 2020

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Amid rising debt risks in low-income developing countries and emerging markets, the IMF and the WB have been implementing a multipronged approach (MPA) to address debt vulnerabilities.
Amplification of debt risks owing to COVID-19 has upped the urgency to implement the MPA and highlights the importance of debt sustainability and transparency for long-term financing for development.
Countries have limited capacities which are further stretched by COVID-19.
Implementation of the MPA by itself may not be sufficient to address debt vulnerabilities and risks from global economic shocks.

Rising debt risks are present in low-income developing countries and emerging markets.
COVID-19 amplifies debt risks and increases urgency for implementing the MPA.
Debt sustainability and transparency are important for long-term financing for development.
Country capacities are limited and further stretched by COVID-19.
The MPA alone may not be sufficient to address debt vulnerabilities and risks from global economic shocks.

Accelerate implementation of the multipronged approach (MPA) given amplified debt risks from COVID-19.
Strengthen debt sustainability analysis and debt transparency to support long-term financing for development.
Provide capacity support to countries whose abilities to implement debt-related policies are constrained by COVID-19.
Recognize the limits of the MPA and consider complementary measures to address risks from global economic shocks.

Subject: Debt sustainability, Debt sustainability analysis, Fiscal risks, Government debt management, Public debt
Keywords: analysis tool, debt transparency, debt vulnerability, IMF data provision framework, IMF debt data provision requirement, IMF-WB CD work, multipronged approach, PP, WB CD effort, WB QPSD database, WB staff

Update on the Joint IMF-WB Multipronged Approach to Address Debt Vulnerabilities (Policy Paper No. 2020/066)