Macroeconomic Developments and Prospects For Low-Income Countries—2024

Policy Papers, April 2, 2024

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Macroeconomic Developments and Prospects For Low-Income Countries—2024

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Bibliographic details

• Published: April 2, 2024
• Series: Policy Papers
• DOI: https://doi.org/10.5089/9798400272400.007

Outlook and key findings

• The outlook for Low-Income Countries (LICs) is gradually improving, but LICs face persistent macroeconomic vulnerabilities, including liquidity challenges due to high debt service.
• There is significant heterogeneity among LICs:
  • The poorest and most fragile countries have faced deep scarring from the pandemic.
  • LICs with diversified economies and Frontier Markets are faring better.
• Achieving inclusive growth and building resilience are essential for LICs to converge with more advanced economies and meet the Sustainable Development Goals (SDGs).
• Building resilience will be critical in the context of a more shock-prone world.

Policy implications and recommended domestic actions

• Decisive domestic actions are required, including:
  • Expanding Social Safety Nets (SSNs).
  • Better targeting Social Safety Nets (SSNs).
• Emphasis on policies that promote inclusive growth toward the SDGs.

External support needs

• Substantial external support is necessary, including:
  • Adequate financing.
  • Policy advice.
  • Capacity development.
  • Where needed, debt relief.
• Addressing liquidity challenges tied to high debt service is a priority.

IMF role and response

• The Fund is further stepping up its support through:
  • Targeted policy advice.
  • Capacity building.
  • Financing.

Source: Macroeconomic Developments and Prospects For Low-Income Countries—2024, April 2, 2024.

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