Estimating Demand for IMF Financing by Low-Income Countries in Response to Shocks
IMF Working Papers, December 1, 2009
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Bibliographic details
- Authors: Yasemin Bal Gündüz
- Published: December 1, 2009
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451874082.001
Main findings
- Various economic variables are significant determinants of Fund financing for Low-Income Countries (LICs): reserve coverage, current account balance to GDP, real GDP growth, macroeconomic stability, and terms of trade shocks.
- Global conditions are also significant determinants: changes in real oil and non-oil commodity prices and changes in world trade.
- The demand for Fund financing by LICs is likely to be cyclical in response to common shocks, with intensity depending on the severity and persistence of adverse shocks.
Methodological note (as presented)
- The paper estimates factors affecting demand for Fund financing by LICs in response to policy and exogenous shocks.
Policy-relevant implications
- Monitoring reserve coverage, current account balance to GDP, real GDP growth, macroeconomic stability, and terms of trade shocks can help anticipate LIC demand for IMF financing.
- Global commodity price movements (real oil and non-oil) and world trade fluctuations should be integrated into assessments of financing needs for LICs.
- The cyclical nature of demand implies that responses should account for both the severity and the persistence of shocks.
Subjects and keywords
- Subject: Balance of payments need, Commodity prices, Current account balance, Oil prices, Terms of trade
- Keywords: Fund financing, real GDP, WP
Source: Estimating Demand for IMF Financing by Low-Income Countries in Response to Shocks, IMF Working Papers (2009), Working Paper No. 2009/263; Yasemin Bal Gündüz.