2026 Review of IMF and World Bank Debt Sustainability Framework for Low Income Countries Consultation
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- 2026 Review of IMF and World Bank Debt Sustainability Framework for Low Income Countries Consultation
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Overview of the review
- The International Monetary Fund (IMF) and World Bank Group (WBG) are conducting a review of the joint IMF-WB Debt Sustainability Framework for Low-Income Countries (LIC-DSF).
- The LIC-DSF is described as an analytical tool for assessing debt vulnerabilities used for countries that mostly rely on IMF and WB concessional financing.
- Uses of LIC-DSF:
- Support policy advice and guide lending decisions by the IMF and WBG.
- Provided as a public good for creditors, borrowers, and other stakeholders.
- Historical context:
- The framework was originally launched in 2005 and is reviewed and updated periodically.
- Rationale for the 2026 review:
- Occurs amidst "elevated debt vulnerabilities, more differentiated financing sources and creditor composition, including increased reliance on domestic and external borrowing on commercial terms."
- The review aims to ensure the LIC-DSF remains "fit-for-purpose and future-proof in this changing debt landscape."
About the public consultation process
- The consultation is titled: "Public Consultation with LIC-DSF Users from June 5 to July 3, 2026."
- Engagement timeline and stakeholder outreach:
- The review process was launched in April 2024 and has included extensive engagement with external stakeholders, including at the IMF-WBG Spring and Annual Meetings and other fora organized by civil society.
- IMF and WBG staffs have periodically engaged with IMF and WBG Boards; in April 2026 staffs presented a set of proposed reforms to the IMF and WBG Boards.
- Purpose of the materials presented in the consultation:
- Provide a primer on the existing LIC-DSF.
- Summarize findings from backward-looking analysis of framework performance.
- Identify areas for improvement to future-proof the framework.
- Outline staffs’ preliminary findings and consideration of reforms to generate open dialogue.
- Next steps:
- Final proposals will reflect outcomes from the public consultation, Boards’ feedback, and other users, and are expected to be presented to the Executive Boards of the IMF and World Bank Group in Autumn 2026.
- New Framework operational timing: Summer 2027.
Proposed reform areas and key questions for feedback
- Enhanced measurement of debt-carrying capacity:
- Proposal: replace world growth with a country-specific measure of exposure to global macro-financial conditions and add a measure of output volatility in the Composite Indicator of Debt-Carrying Capacity.
- Consultation asks whether these changes would better differentiate countries’ debt-carrying capacity.
- Mechanical signals of public debt stress:
- Proposal: introduce new mechanical signals of overall public debt stress based on:
- Overall Public Debt to GDP,
- Public Gross Financing Needs to Revenues excluding grants,
- Interest Payments on Overall Public Debt to Revenues excluding grants.
- Consultation asks whether these are helpful additions, whether mechanical signals of external public debt stress should remain important, and whether staffs’ proposed balance between signals of external and overall debt stress is appropriate.
- Granularity of High Risk rating:
- Proposal: provide greater granularity of the High Risk rating to capture the size, timing, and type of breach of thresholds.
- Consultation asks whether the proposed approach would be useful.
- Debt data confidence:
- Proposal: highlight challenges around the quality of debt data and adopt a suggested approach to capture key aspects of debt data quality.
- Consultation asks whether this would be pragmatic and whether it would provide appropriate incentives to improve debt data recording and reporting.
- Domestic debt module:
- Proposal: a closer look at domestic debt vulnerabilities with staff-proposed approaches offering important insights.
- Consultation asks whether other aspects should be captured, including qualitative discussion around domestic debt vulnerabilities.
- Long-term module:
- Proposal: a long-term module to help countries assess public debt stress and sustainability implications of policy and investment decisions associated with development and long-term challenges, including those stemming from climate adaptation.
- Consultation asks whether the proposed long-term module will help countries assess these implications.
Consultation logistics and submission requirements
- Submission window and formats:
- Public consultation period: June 5 to July 3, 2026.
- All feedback must be submitted electronically through the online form; paper submissions will not be considered.
- Preferred submission date: ideally by June 26th and no later than July 3rd.
- Availability of materials:
- A presentation and an accompanying background note were provided to support the consultation materials.
- Languages:
- Submit feedback: English | French | Spanish | Arabic.
- For Arabic translation of the survey, request by email with subject line: “LIC-DSF Public Consultation – Arabic translation of the Survey.”
- Contact emails for questions:
- Emilia Berazategui, CSO Lead: eberazategui@Imf.org
- licdsf_engagement2026@worldbank.org
Survey structure and specific respondent questions
- Demographic information (Section A) includes required fields:
- *1 First Name
- *2 Surname
- *3 Email Address
- *4 Name of the organization you represent
- *5 Country where the Headquarters/main office of the organization you represent is located
- *6 Publication preference for responses (choice between anonymizing name/organization or publishing with name/organization)
- *7 Organization category (includes options such as Non-governmental organizations (NGOs) and CSOs; Academics; Research Centers; Think Tanks; Business forums; Faith based organizations; Youth organizations; Labor unions and professional organizations; Local community groups; Philanthropic and charitable organizations; Gender and women’s associations; Social movements (including representatives of the informal sector and rural areas); Government agencies; International Financial Institutions; Debt advisory firms; Other (please specify))
- *8 Main geographical focus of the organization (choices include Global; Sub-Saharan Africa; Asia/Pacific; Europe; North Africa, Middle East, and Central Asia; Americas; Local (please specify the country))
- Feedback questions (Section B) include:
- 9. Open-ended views on the main reform proposals (up to 10,000 characters), with guidance to consider the specific reform areas listed above.
- 10. Question on whether the proposed reforms strike the right balance between analytical rigor and ease-of-use (1,700 characters).
- 11. Additional feedback on the LIC-DSF (3,500 characters).
- 12. Optional: insert URL of a report related to the LIC DSF for staffs’ consideration (200 characters).
Content in this bundle
References