FY 2022 - FY 2024 Medium-Term Budget

Policy Papers, May 27, 2021

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The Fund faces twin challenges from the COVID-19 crisis: uneven early crisis recovery across countries and widespread daunting crisis legacies.
Longer-term challenges requiring stepped‑up Fund effort and partnership include climate change, digitalization, and increasing divergence within and between countries.

Following a decade of flat real budgets, staff will propose a structural augmentation for consideration by fall 2021 to be implemented over two to three years beginning in FY 23.
After the proposed augmentation, the budget would remain stable on a real basis at a new, higher level, recognizing the importance of ongoing fiscal prudence.

The proposed FY 22 budget:
- Sustains crisis response.
- Provides incremental resources for long-term priorities within the flat real budget envelope.
- Is built on extensive reprioritization and savings, including from modernization.
- Includes a proposed temporary increase in the carry forward ceiling to address crisis needs during the FY 22 to FY 24 period.

Large-scale business modernization programs continue to be rolled out to strengthen agility and efficiency of Fund operations.
In response to a shift toward cloud-based IT solutions, staff propose a change in the budgetary treatment of these expenses.
Investment in facilities will focus on timely updates, repairs, and modernization to prepare for a post-crisis Fund with greater virtual engagement and a new hybrid office environment.

The FY 22–24 medium-term budget framework, including assumptions for a material augmentation, is consistent with:
- A projected surplus in the Fund’s medium-term income position.
- Continued progress towards the precautionary balance target for coming years.

Risks to the budget remain elevated and above risk acceptance levels in the midst of a global crisis.
Key risk drivers include:
- Uncertainty around the level of demand for Fund programs and ensuing staffing needs.
- Uncertainty around future donor funding for capacity development (CD).
Enterprise risk management continues to be strengthened alongside the budget.

Subjects: Budget planning and preparation, Climate change, COVID-19, Environment, Expenditure, Financial Sector Assessment Program, Financial sector policy and analysis, Health, Monetary policy, Political economy, Public financial management (PFM)
Keywords: approved FY, budget framework, Budget planning and preparation, budget summary, capital budget envelope, Climate change, COVID-19, Financial Sector Assessment Program, Global, IMF's budget deflator, Medium-Term capital budget, risk matrix

FY 2022 - FY 2024 Medium-Term Budget, Policy Paper No. 2021/038 (2021); Pages: 79; DOI: https://doi.org/10.5089/9781513583327.007