Low-Income Countries
The IMF has acted with unprecedented speed and scale to support low-income countries during the pandemic. The Fund provided financial support to 53 of 69 eligible low-income countries in 2020 and in the first half of 2021, with about US$14 billion disbursed as zero percent interest rate loans from the Poverty Reduction and Growth Trust.
Most of this support was through the Fund’s emergency financing instruments—the Rapid Credit Facility (RCF) and Rapid Financing Instrument (RFI)—which provide immediate, one-time disbursements to countries facing urgent balance of payments needs. The Fund was able to respond to a record number of requests for financial assistance through a series of temporary access limit increases to the RCF and RFI, and temporary increases in the Poverty Reduction and Growth Trust (PRGT) overall access limits.
The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for the People’s Republic of China—Hong Kong Special Administrative Region (SAR) and considered and endorsed the staff appraisal without meeting on a lapse-of-time basis. , The authorities have consented to the publication of the Staff Report prepared for this consultation.
The Spanish economy has continued to outperform the euro area, with solid growth expected this year despite the adverse impact from the war in the Middle East. Growth should then gradually ease over the medium term as immigration slows and population aging intensifies. Risks to growth are mainly on the downside, and those to inflation on the upside.
IMF staff and the Togolese authorities reached a staff-level agreement on economic policies and reforms to complete the combined third and fourth reviews of the authorities’ economic reform program supported by the Extended Credit Facility (ECF) arrangement. The agreement is subject to approval by the IMF Executive Board. Upon approval, Togo would have access to SDR 80.74 million (about USD 110.8 million).
The WAEMU was among the fastest growing regions in the world in 2025, with low inflation and external reserves at comfortable levels following a sharp recovery. Fiscal deficits narrowed and public debt declined for the first time in over a decade.
IMF Executive Board completed the second review of Argentina’s 48‑month Extended Fund Facility (EFF) arrangement, and concluded the 2026 Article IV consultation.
Management of the International Monetary Fund (IMF) has approved the third review of the Staff-Monitored Program (SMP) with Haiti, together with the authorities’ request for an extension of the program through June 19, 2027. All program targets were met as of end-December 2025. Reform progress continues, albeit at a slower pace than anticipated in some areas due to security conditions, capacity constraints, and political uncertainty.
Governments can protect vulnerable households, keep businesses open, and preserve price signals without straining public finances
Resilience, supervision, and international coordination are essential to safeguarding global financial markets as new AI tools enable attackers
Fiscal pressures in developing countries make stronger domestic revenue systems more important than ever
Shipping and flight disruptions highlight new fault lines in the global economy and their costs for growth and livelihoods
To weather the shock, policymakers should ensure that any near-term measures are time-bound and targeted at the most vulnerable, and maintain the focus on medium-term development objectives
Countries face vastly different exposure to higher oil prices and supply uncertainty, shaped by whether they import or export, and how much policy space they have to respond
On May 8, 2026, the IMF’s Executive Board approved another six-month extension of the period to consent to the quota increase and to the New Arrangements to Borrow (NAB) rollback under the Sixteenth General Review of Quotas (GRQ), through November 15, 2026. Such extension also extends the period of consent for quota increases under the Fourteenth GRQ. The previous deadline was due to expire on May 15, 2026. However, the Board of Governors Resolution No. 79-1 provides that the Executive Board may extend the period for consent as it may determine.
This paper updates the projections of the Fund’s income position for FY 2026 and FY 2027–2028 and proposes related decisions for the current and the following financial years. The paper includes proposed decisions to transfer SDR 1.38 billion of GRA resources to the Interim Placement Administered Account and to transfer estimated Fixed Income income and a payout from the Endowment Subaccount to help meet administrative expenses. It also includes a proposed decision to keep the margin for the rate of charge unchanged at 60 basis points for FY 2027–2028. The Fund’s total comprehensive income for FY 2026 is projected at about SDR 3.8 billion; reflecting an estimated pension-related remeasurement gain and retained income in the Investment Account. The Executive Board approved these decisions on April 28; 2026.
The global economic and financial environment is characterized by profound transformation and heightened uncertainty, including that stemming from the war in the Middle East. In this context, demand for Fund engagement is expected to remain strong, continuing to require difficult trade-offs within a real flat budget. The FY27-29 budget maintains a longstanding emphasis on discipline, focus, and agility in line with the evolving needs of the membership. Implementation of a Fund-wide streamlining exercise is reinforcing ongoing department-level prioritization to create space for the highest priority needs, relieve staff work pressures, and maintain capacity for unforeseen demands.
The Integrated Policy Framework (IPF) assists IMF staff in providing advice on the joint use of foreign exchange intervention (FXI), macroprudential measures (MPMs), and capital flow management measures (CFMs), alongside standard monetary and fiscal policies. This note provides overarching considerations in applying the IPF to low-income countries (LICs), building on previous Fund advice.
Diriyah Guiding Principles on IMF Quota and Governance Reforms
Domestic Resource Mobilization (DRM is central to achieving sustainable financing for development, building fiscal buffers, and strengthening state capacity. Recent work by the IMF and the World Bank shows that many countries—especially low-income countries (LICs) and fragile and conflict-affected states (FCSs)—are still collecting less than 15 percent of GDP in tax revenue. World Bank and IMF research suggests that collection beyond this threshold is linked to lasting improvements in growth, public service delivery, and state capacity. DRM—central to the IMF-WBG three pillar approach to helping countries address liquidity challenges (IMF and World Bank 2024a)—is crucial for building fiscal space to advance public spending for development, reduce reliance on volatile external financing, support jobs and growth, and strengthen the social contract between the state and its citizens.
This paper develops high frequency trade estimates at the country level by applying nowcasting methodologies to satellite-based big data on vessel movements sourced from IMF PortWatch. The approach provides a timely estimate of monthly trade at the country level that can be produced and released within 7 working days. The paper validates the nowcasting trade estimates against official data for an initial wave of countries representing advanced economies, emerging markets and small island developing states: Brazil, Jamaica, Japan, Samoa, and the United States. The nowcasting methodology produces trade estimates that perform well compared to the official statistics, with the best fit for advanced economies and large emerging markets. The paper identifies key complementary information to improve the presented nowcasting methodology to develop country trade estimates. The paper also considers an application to estimates of U.S. imports during a period of elevated trade tensions.
This paper investigates why the post-COVID inflation surge, though globally synchronized, led to widely divergent outcomes across countries. Using cross-country regressions for 130 economies and local projections methods for 70 advanced and emerging markets, we analyze the structural, institutional, and policy determinants of post-pandemic inflation dynamics. The results indicate that historical inflation and the scale of domestic energy price shocks account for most of the cross-country variation in cumulative post-COVID inflation. In contrast, many frequently cited country-specific, macroeconomic fundamentals and institutional features exhibit limited power to explain cross-country variation. The association between post-COVID inflation and domestic policy responses is also weak, although endogeneity complicates a clear causal interpretation. The analysis further reveals that pass-through from energy prices to headline inflation intensified markedly in the post-COVID period, particularly in emerging markets, in non-inflation-targeting regimes, and in countries that did not expand fossil fuel subsidies. These findings highlight the asymmetric transmission of supply shocks and underscore the importance of credibility, historical inflation experience, and energy policy design in shaping inflation persistence. Strengthening central bank credibility and anchoring expectations may be essential to bolster resilience against future global supply disruptions.
We study inference via heteroskedasticity in linear models commonly used for macroeconomic policy analysis, where covariate endogeneity must often be addressed with limited time and data. Our framework nests standard heteroskedasticity-based approaches, allows for new non-nested restrictions, and does not require ex-ante regime labelling. We propose an easily implementable weak-identification-robust test and derive sufficient conditions for its validity. Simulation results show good size and power properties in a wide range of settings. Empirical applications to the fuel-price passthrough in Sierra Leone, the effect of remittances on consumption in the Philippines, and exchange-rate passthroughs in many countries illustrate the versatility and scalability of our approach.
This paper empirically reassesses monetary policy transmission in emerging and frontier market economies in Sub-Saharan Africa (SSA EFMs). Using the identification approach of Romer and Romer (2004), we construct measures of monetary policy shocks and provide evidence on transmission mechanisms in the region. We show that monetary policy shocks pass through quickly to short-term market interest rates and lead to persistent increases in bank deposit and lending rates in most economies, indicating an operative bank-based interest rate channel. By contrast, exchange rates generally do not appreciate and, in many cases, depreciate following monetary tightening, consistent with the exchange rate puzzle—suggesting that interest rate hikes alone may be insufficient to systematically influence exchange rate movements. We also find that contractionary monetary policy reduces both output and inflation, with effects that are modest and notably weaker than in more developed economies. In addition, we find that transmission is stronger in economies that have adopted, or are transitioning toward, inflation-targeting regimes. Finally, we show that cross-country heterogeneity in transmission largely reflects differences in monetary policy transparency, financial development, and, to a lesser extent, fiscal dominance.
This paper provides a first comprehensive assessment of industrial policy (IP) across Asia‑Pacific and its potential to enable structural transformation. Building an IP database for 2009–2024, paired with a rich dataset, the paper documents a large wave of IP interventions. Subsidies dominate, followed by import-limiting measures. Novel applications of machine‑learning and clustering approaches to assess IP targeting suggest that, ex-ante, about three-quarters of IP could align with structural transformation strategies, including relatively safe (“safe-bets”) and risky (“moonshots”) strategies promoting technological upgrading and diversification, and strategies to alleviate market‑frictions and distortions in key sectoral nodes. IP’s ex-post linkages to trade, competitiveness, and domestic firms’ indicators are small and short‑lived; sustained gains that could lead into structural transformation appear only sporadically. Our findings underscore the need for a more parsimonious and carefully‑designed IP—anchored to targeting clear market‑failure rationales and complemented by ambitious structural reforms—potentially enhancing effectiveness and lowering net costs.
We document the state-dependence of monetary policy transmission to output and core consumer prices in a sample of eleven large inflation-targeting emerging markets along three cyclical dimensions: the business cycle position, the monetary policy stance, and the level of trend inflation. We show that monetary policy has strong effects on output during recessions and after a period of loose monetary policy, but little to no impact during expansions or when monetary policy has been tight. In contrast, the response of prices is muted regardless of business cycle position or monetary policy stance. Transmission also depends on trend inflation: when trend inflation is low, monetary policy has a stronger impact on output and a weaker effect on prices, whereas a high-inflation environment dampens the output response and amplifies price adjustments. These findings are broadly consistent with the presence of financial frictions in the form of occasionally binding borrowing constraints, endogenous frequency of price adjustments, loss aversion preferences, and a convex Phillips Curve.
