Macroeconomic Developments and Prospects In Low-Income Countries—2021

Policy Papers, March 30, 2021

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Sixth paper in a series examining macroeconomic developments and prospects in low-income countries (LICs).
LICs are defined in this report as the countries eligible to PRGT facilities (69 countries).
Page count: 47.

The first section discusses recent macroeconomic developments and trends across LICs.
The analysis covers themes including: Climate finance, COVID-19, Environment, Financial institutions, Health, Income, Monetary policy, Multilateral development institutions, National accounts, Political economy.

The second section estimates LICs’ financing needs up to 2025 to resume and accelerate income convergence with advanced economies (AEs).
Financing needs are estimated by:
- Calculating additional financing that would enable LICs to step up spending response to COVID, including vaccination needs.
- Ensuring rebuilding or maintaining external buffers to enhance resilience.
- Assessing financing required to allow LICs to accelerate convergence with AEs.

The paper discusses a mix of financing options:
- Concessional financing from the international financial institutions.
- Grants and loans from bilateral donors.
- Private financing and debt operations.
Domestic reforms within LICs are highlighted as a key component to:
- Foster growth.
- Enhance private investment.
- Raise public revenues.
- Increase efficiency of spending.

Keywords include: Caribbean, Climate finance, COVID-19, downside scenario, emergency financing from the IMF, financing needs, financing support, Global, Income, LIC financing, Multilateral development institutions.
Subject focus spans climate finance, COVID-19, and other macroeconomic and policy areas relevant to LICs.

International Monetary Fund. "Macroeconomic Developments and Prospects In Low-Income Countries—2021", Policy Papers 2021, 020 (2021).