## Macro-Financial Policies and Vulnerabilities in IMF-Supported Programs

_IMF Working Papers, May 23, 2025_

## Source details

**Canonical URL:** [Macro-Financial Policies and Vulnerabilities in IMF-Supported Programs](https://www.imf.org/en/publications/wp/issues/2025/05/23/macro-financial-policies-and-vulnerabilities-in-imf-supported-programs-566486)

## Other formats

- [Markdown version](/en/publications/wp/issues/2025/05/23/macro-financial-policies-and-vulnerabilities-in-imf-supported-programs-566486/index.md)
- [Structured JSON version](/en/publications/wp/issues/2025/05/23/macro-financial-policies-and-vulnerabilities-in-imf-supported-programs-566486/index.json)
- [Bundle manifest](/en/publications/wp/issues/2025/05/23/macro-financial-policies-and-vulnerabilities-in-imf-supported-programs-566486/bundle-manifest.json)

## Bibliographic details
- Authors: Yazan Al-Karablieh, José Marzluf, Hector Perez-Saiz, Azzam Santosa, Fabian Valencia
- Published: May 23, 2025
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229008945.001

---

### Data and Methodology
- Constructed a unique dataset by collecting macro-financial commitments data using textual analysis of the Memorandum of Economic and Financial Policies (MEFPs).
- Combined MEFP-derived macro-financial commitments data with information on structural conditionality.
- Empirical approach: staggered difference-in-differences methodology.

### Main Findings
- IMF-supported programs with macro-financial policy commitments are followed by periods of lower non-performing loans relative to IMF-supported programs without macro-financial commitments, mostly for the post global financial crisis (GFC) period before the COVID-19 pandemic.
- In some cases, programs with macro-financial commitments are followed by lower credit-to-GDP ratios relative to programs without such commitments.
- The NPL-to-loans ratio does not seem to decrease as a result of credit expansion.
- Stronger and more abrupt declines in credit-to-GDP are observed following ex-post macro-financial policies (those implemented after a crisis occurs, e.g., restructuring).
- Milder and more gradual declines in credit-to-GDP are observed following ex-ante macro-financial policies (those implemented before risks materialize, e.g., regulatory requirements).
- Policy responses are larger when countries have positive credit gaps at the start of the program than when credit gaps are negative.
- Macro-financial policies targeting financial inclusion tend to increase credit-to-GDP ratios in low credit-to-GDP program countries.

### Interpretations and Implications
- The results emphasize the importance of considering a country’s position in the credit cycle in program design.
- Addressing vulnerabilities preemptively (ex-ante policies) can reduce the need for abrupt corrections when risks materialize (ex-post policies).
- Financial-inclusion–oriented macro-financial policies can expand credit in contexts with low credit-to-GDP.

---

## Content in this bundle

- **Working Paper**
  - [Working Paper (Markdown version)](/-/media/files/publications/wp/2025/english/wpiea2025097-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Working Paper (PDF)](/-/media/files/publications/wp/2025/english/wpiea2025097-print-pdf.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2025/05/23/macro-financial-policies-and-vulnerabilities-in-imf-supported-programs-566486_