Low-Income Countries


Russia’s war in Ukraine and the related fallout have created a challenging external environment for the post-pandemic recovery of low-income countries (LICs). Food and commodity prices linger at elevated level with worsening food security. Global financial conditions tighten as major economies are fighting against inflation. The delay in LICs’ income per capita convergence to that of advanced economies (AEs) is expected to last into the medium term.

Support for LICs


(as of May 12, 2023) 1/

Contributors In SDR millions In USD millions 
Subsidy Target 2,300 3,093
Total Subsidy Pledges 1,378  1,854
    Australia* 3/  36  48
    Canada*  60  81
    China*3/  168 226
    Denmark  19 26
    Estonia*3/  0.4 0.5
    France* 105 142
    Germany* 81 109
    Greece 13 17
    Ireland 19 26
    Italy* 83 112
    Japan*  170  228
    Korea 41 56
    Lithuania* 2 3
    Morocco* 3/ 0.2 0.2
    Netherlands* 23 31
    Norway 9 12
    Philippines*  4  5
    Portugal*3/  11  15
    Singapore  21  28
    Slovak Republic*  6  8
    Spain*  50  67
    Sweden*  22  30
    Switzerland*  41  56
    Thailand*  8  11
    Trinidad and Tobago  3  4
    United Kingdom* 4/  250  336
    United States*  55  74
    European Comission*  78  105
  of which, subsidy contributions effected 1,252 1,685
Loans target 12,600 16,947
Total Loan Pledges 11,600 15,602
    Australia*  500  672
    Belgium  250  336
    Canada*  500  672
    China*  1,000 1,345
    Denmark  150 202
    Finland*  300 403
    France* 1,000 1,345
    Italy* 1,000 1,345
    Japan* 1,000 1,345
    Korea 450 605
    Netherlands* 500 672
    Norway 150 202
    Saudi Arabia* 5/  2,800  3,766
    Spain*  350  471
    Sweden*  150  202
    United Kingdom* 4/  1,500  2,017
  of which, effective agreements 10,750 14,458

* Effective pledges/ agreements.
1/ Based on SDR/US$ exchange rate as of May 12, 2023.
2/ Including grant contributions received and to be received in future installments.
3/ To be generated over time in the form of net investment earnings from effected deposit and investment agreements.
4/ The loan resources by the United Kingdom have been provided at a concessional rate and are estimated will generate about SDR 250 million in implicit subsidies, subject to SDR interest rate assumptions.
5/ The loan resources by Saudi Arabia have been provided under three separate borrowing agreements (SDR 550 million, SDR 225 million, and SDR 2,025 million).


Fiscal Policy Can Help Tame Inflation and Protect the Most Vulnerable
April 3, 2023

Smart fiscal policy can help restore price stability and lessen the impact of the cost-of-living crisis.

The Time Is Now: We Must Step Up Support For the Poorest Countries
March 31, 2023

Low-income countries face huge economic challenges and financing needs. They rely on international institutions, including the IMF’s Poverty Reduction and Growth Trust, for vital policy and financial support. Economically stronger countries have a responsibility to contribute to the funding of this support.

Africa’s Rapid Economic Growth Hasn’t Fully Closed Income Gaps
September 21, 2022

Despite decades of rapid growth, regional inequalities in sub-Saharan Africa persist. 

How Europe Can Protect the Poor from Surging Energy Prices
August 3, 2022

With fossil fuels likely to remain expensive for some time, governments should let retail prices rise to promote energy conservation while protecting poorer households.

Middle East Needs Fairer Taxes to Aid Growth and Ease Inequality
July 6, 2022

More progressive taxes with fewer exemptions would help governments pay for immediate spending priorities and make societies fairer. 

Why Countries Must Cooperate on Carbon Prices
May 19, 2022

An international floor price for carbon could speed the world’s transition to green energy without compromising countries’ competitiveness.

Policy Papers

Review Of The Adequacy Of The Fund’s Precautionary Balances
December 20, 2022

On December 12, 2022, the IMF’s Executive Board reviewed the adequacy of the Fund’s precautionary balances. The review took place on the standard two-year cycle, after an interim review in December 2021. Precautionary balances comprise the Fund’s general and special reserves. They are a key element of the IMF’s multi-layered framework for managing financial risks. Precautionary balances provide a buffer to protect the Fund against potential losses, resulting from credit, income, and other financial risks. In conducting the review, the Executive Board applied the rules-based framework agreed in 2010. Precautionary balances have risen further since the 2021 interim review and coverage metrics have strengthened. At the same, credit and other financial risks have also increased. The pace of reserve accumulation is expected to remain adequate. Against this background, Executive Directors endorsed staff’s proposal to retain the current medium-term target of SDR 25 billion and the minimum floor of SDR 15 billion. The Board also discussed the role of surcharges, which are primarily a component of the Fund’s risk management framework but also contribute to reserves accumulation.

The Fund’s Income Position for FY 2022—Actual Outcome
December 16, 2022

This paper reports on the Fund’s income position for FY 2022 following the closing of the Fund’s accounts for the financial year and completion of the external audit.

Macroeconomic Developments and Prospects in Low-Income Countries - 2022
December 8, 2022

Russia’s war in Ukraine and the related fallout have created a challenging external environment for the post-pandemic recovery of low-income countries (LICs). Food and commodity prices linger at elevated level with worsening food security. Global financial conditions tighten as major economies are fighting against inflation. The delay in LICs’ income per capita convergence to that of advanced economies (AEs) is expected to last into the medium term.

Guidance For The Investment Of Temporary Resources To Generate Income To Contribute To PRG, PRG-HIPC, And CCR Trusts Assets
November 7, 2022

In July 2017, the Executive Board adopted a decision (hereinafter the ”Decision”) regarding the investment of resources provided to the Poverty Reduction and Growth Trust (“PRG Trust”) and other trusts on a temporary basis with the purpose of generating income for the operations of these trusts (“temporary resources”). This paper proposes that the Decision be amended to clarify that those temporary resources invested under the third option for PRG Trust contributors will be centralized in the Deposit and Investment Account (DIA).

Review of The Fund's Income Position for FY 2022 and FY 2023–2024
May 27, 2022

This paper updates the projections of the Fund’s income position for FY 2022 and FY 2023–2024 and proposes related decisions for the current financial year. The paper also includes a proposed decision to set the margin for the rate of charge for financial years 2023 and 2024.

Interim Review of The Adequacy of The Fund’s Precautionary Balances
December 16, 2021

Precautionary balances are a key element of the Fund’s multilayered framework to mitigate financial risks. Overall financial risks remain elevated but have not increased significantly since the last review. Staff proposes to leave the medium-term target of SDR 25 billion, and the minimum floor of SDR 15 billion, unchanged at this time. With the projected increase in lending income, the pace of reserve accumulation is expected to remain adequate relative to the medium-term indicative target. The paper also reviews policy factors discussed in recent Board meetings that affect the level and accumulation of reserves.

Research & Publications

The Distributional and Fiscal Implications of Public Utility Pricing
June 2, 2023

The setting of public utility prices involves balancing various competing government policy objectives, from equity concerns to ensuring the financial sustainability of providers and balancing public finances. In practice, public utility pricing often departs significantly from government objectives and tends to be characterized by unnecessarily complex price schedules, below cost-recovery tariff rates, and sectoral inefficiencies that contribute to large fiscal costs. Countries commonly embark on utility pricing reform in response to these heavy fiscal pressures. The paper discusses various reform options available to governments, with a focus on residential pricing schedules, highlighting their fiscal, financial, redistributive, and efficiency implications.

Will Working from Home Stick in Developing Economies?
May 26, 2023

In developing economies, a shift to working from home during the COVID-19 pandemic varies substantially. An increase in teleworking days per week ranges from 0.7 to 17.6 percentage points across 10 developing countries covered by an online survey to about 500 respondents per country. An estimated income discount associated with telework disappeared temporarily at the onset of the pandemic. A calibrated model indicates that workers’ preferences to telework may largely depend on their educational attainments. Whether telework will sustain in these countries could depend on obstacles to telework, particularly for workers with less education, and a degree of economy-wide externality.

The Anatomy of the Financial Inclusion Gap in the Caucasus and Central Asia
May 26, 2023

This paper analyses how financial inclusion in the Caucasus and Central Asia (CCA) compares to peers in Central and Eastern Europe (CEE). Using individual-level survey data, it shows that the probability of being financially included, as proxied by account ownership in financial institutions, is substantially lower across gender, income groups, and education levels in all CCA countries relative to CEE comparators. Key determinants of this financial inclusion gap are lower financial and human development indices, weak rule of law, and physical access to bank branches or ATMs. This suggests that targeted policies aimed at boosting financial and human development, strengthening the rule of law, and supporting fintech solutions can broaden financial inclusion in the CCA.

Benchmarking Infrastructure Using Public Investment Efficiency Frontiers
May 12, 2023

With limited financing options, increasing investment efficiency will be a critical avenue to building infrastructure for many countries, particularly in the context of post-pandemic recovery and rising debt emanating from higher energy costs and other pressures. Estimating investment efficiency, however, presents many methodological pitfalls. Using various methods—–stochastic frontier analysis, data envelopment analysis (DEA), and bootstrapped DEA—this paper estimates efficiency scores for a wide range of countries employing metrics of infrastructure quantity and utilization. We find that efficiency scores are relatively robust across methodologies and data used. A considerable efficiency gap exists: Removing all inefficiencies could increase infrastructure output by 55 percent overall, when averaging across 12 estimation approaches—in particular, by 45 percent for advanced economies, 54 percent for emerging countries, and 65 percent for low income countries. Infrastructure output would increase by a still-sizeable 30 percent if instead of eliminating all efficiency, countries achieved the efficiency level of their income group’s 90th percentile.

Remittances and Social Safety Nets During COVID-19: Evidence From Georgia and the Kyrgyz Republic
May 5, 2023

Remittance flows in emerging market and developing economies were surprisingly resilient during the COVID-19 crisis, providing much-needed income support for remittance-receiving households. However, households were impacted differently across income distributions. Using novel high-frequency household panel data for Georgia and the Kyrgyz Republic and a difference-in-differences approach, we find that as household income fell during the pandemic, remittance-receiving households were more affected than non-remittance-receiving households. Importantly, we find that the incomes of poor, remittance-receiving households in the Kyrgyz Republic were more adversely affected than their non-remittance-receiving counterparts. In contrast, in Georgia, affluent remittance-receiving households experienced more significant income declines than poor remittance-receiving households. This heterogeneous impact can largely be explained by variations in the effectiveness of social safety nets in the two countries. Our results have important policy implications. Although remittances remained resilient during the pandemic, they affected households differently. As such, policymakers should prioritize addressing gaps in social safety nets to support the most vulnerable.

European Housing Markets at a Turning Point – Risks, Household and Bank Vulnerabilities, and Policy Options
March 24, 2023

European housing markets are at a turning point as the cost-of-living crisis has eroded real incomes and the surge in interest rates has made borrowers more vulnerable to financial distress. This paper aims to (i) shed light on the risks in European housing markets, (ii) quantify household vulnerabilties, (iii) assess banking sector implications and (iv) examine policies’ effectiveness using simulations based on microdata from the Household Finance and Consumption Survey (HFCS) and EU statistics on income and living conditions (EU-SILC). Under the baseline IMF macroeconomic forecast, the share of households that could struggle to meet basic expenses could rise by 10 pps reaching a third of all households by end 2023. Under an adverse scenario, 45 percent of households could be financially stretched, representing over 40 percent of mortgage debt and 45 percent of consumer debt. The impact on the banking sector seems contained under the baseline forecast, though there are pockets of vulnerability. A 20 percent house price correction could deplete CET1 capital by 100-300 basis points. Fiscal measures, such as subsidies to the bottom income tercile, could save 7 percent of households from financial distress at an estimated cost of 0.8 percent of GDP.


Promoting Climate-Resilient and Green Development in Africa | Africa Perspectives
February 7, 2023

A conversation on how sub-Saharan Africa can promote climate-resilient and green development. African Department director Abebe Aemro Selassie hosts the premiere episode of Africa Perspectives.

Zambia: Towards a More Resilient and Inclusive Future
February 1, 2023

A discussion with University of Zambia students on how Zambia is making progress in its reform efforts to restore sustainability, invest in youth, combat corruption, and attract investment and the role of the IMF.

Strengthening Institutions for Sustainable Growth in the Post-COVID World
January 6, 2023

The conference provides an opportunity to discuss how South Asia can build on its development success in the aftermath of the COVID-19 pandemic and geopolitical tensions to achieve its potential.

The Resilience and Sustainability Trust - A Dialogue with Countries
December 13, 2022

A discussion on how the Resilience and Sustainability Trust fits wider climate objectives at the country and global level.

Regional Economic Outlook for the Middle East and North Africa, October 2022
November 2, 2022

Jihad Azour, Director of the Middle East and Central Asia Department, presents the IMF’s latest economic outlook and growth projections for the MENA region

Living on the Edge: IMF Outlook for sub-Saharan Africa Nairobi Launch
November 1, 2022

A presentation and discussion of the October 2022 Regional Economic Outlook for Sub-Saharan Africa.


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Developing Economies Seminars

Developing Economies Seminars
A flagship seminar at the Fund, the Developing Economies Seminar Series focuses on topical policy issues for developing countries.
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FCDO/IMF Project

FCDO/IMF Project
The IMF has partnered with the UK's Foreign, Commonwealth and Development Office (FCDO) to study critical macroeconomic policy issues in low-income countries to promote sustainable and inclusive growth in low-income countries.
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