Macroeconomic Developments and Prospects in Low-Income Developing Countries—2019

Policy Papers, December 11, 2019

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This paper is the fifth in a series that examines macroeconomic developments and prospects in low-income developing countries (LIDCs).
LIDCs are a group of 59 IMF member countries primarily defined by income per capita below a threshold level.
LIDCs contain one fifth of the world’s population—1.5 billion people—but account for only 4 percent of global output.

Chapter 1 — Macroeconomic developments and growth drivers:
- Discusses recent macroeconomic developments and trends across LIDCs.
- Uses growth decompositions to explore the key drivers of growth performance in LIDCs.
Chapter 2 — Value-added tax (VAT) implementation:
- Examines the challenges faced by LIDCs in implementing a value-added tax system.
- Treats VAT as a key component of a strong national tax system.
Chapter 3 — Financial safety nets:
- Discusses how financial safety nets can be appropriately tailored to the specific needs of LIDCs.
- Emphasizes that an effective safety net is important for ensuring financial stability and underpinning public confidence in the financial system, thereby promoting financial intermediation.

Strengthen tax systems in LIDCs with emphasis on implementing or improving value-added tax systems.
Tailor financial safety nets to LIDC-specific circumstances to support financial stability and public confidence in the financial system and to promote financial intermediation.
Analyze and address growth performance by decomposing growth drivers to inform policy prioritization.

International Monetary Fund. "Macroeconomic Developments and Prospects in Low-Income Developing Countries—2019", Policy Papers 2019, 039 (2019).