Low-Income Countries
The IMF has acted with unprecedented speed and scale to support low-income countries during the pandemic. The Fund provided financial support to 53 of 69 eligible low-income countries in 2020 and in the first half of 2021, with about US$14 billion disbursed as zero percent interest rate loans from the Poverty Reduction and Growth Trust.
Most of this support was through the Fund’s emergency financing instruments—the Rapid Credit Facility (RCF) and Rapid Financing Instrument (RFI)—which provide immediate, one-time disbursements to countries facing urgent balance of payments needs. The Fund was able to respond to a record number of requests for financial assistance through a series of temporary access limit increases to the RCF and RFI, and temporary increases in the Poverty Reduction and Growth Trust (PRGT) overall access limits.
IMF Executive Board Concludes 2026 Article IV Consultation with St. Vincent and the Grenadines
IMF Executive Board Completes the Eleventh Review under the Extended Credit Facility Arrangement for Guinea-Bissau
IMF Staff Reaches Staff Level Agreement on the First Review of the Extended Fund Facility Arrangement and Concludes Discussions of the 2026 Article IV Consultation with Ukraine.
IMF and Niger Reach Staff-Level Agreement on the Ninth Review Under the Extended Credit Facility
An International Monetary Fund (IMF) team, led by Pablo Lopez Murphy, visited Maputo from June 8–12 to assess the economic situation and outlook, and hold discussions with the Mozambican government on their plan for navigating the challenges ahead.
Remarks by Tobias Adrian, IMF Financial Counsellor and Director of the Monetary and Capital Markets Department, at the Federal Reserve Bank of Boston
Economic thinking must evolve to account for a shift in how nations pursue security, growth, and influence
As governments intervene more, evidence shows that the benefits are modest and depend on thoughtful design
The region’s central banks have built significant credibility over two decades, anchoring price expectations and bolstering resilience against external shocks
Governments can protect vulnerable households, keep businesses open, and preserve price signals without straining public finances
Resilience, supervision, and international coordination are essential to safeguarding global financial markets as new AI tools enable attackers
Fiscal pressures in developing countries make stronger domestic revenue systems more important than ever
I welcome the IEO’s comprehensive evaluation, which finds that the Fund’s work on climate has had high value for our members. The report provides a well-structured assessment of the Fund’s climate-related engagement across surveillance, lending, and capacity development, highlighting how this work has been anchored in members’ macroeconomic and financial frameworks. To follow up on the IEO’s three main recommendations—which I support, with some qualifications—a Management Implementation Plan (MIP) will be developed, consistent with resource constraints and closely aligned with existing workstreams, including the ongoing CSR, ROC, and FSAP reviews.
Executive Directors welcomed the report of the Independent Evaluation Office (IEO) on the IMF and Climate Change and its well-structured assessment of the Fund’s engagement across surveillance, lending, and capacity development. Most Directors concurred with the report’s positive assessment that the Fund’s work on climate, anchored in members’ macroeconomic and financial frameworks, has provided high value for the membership and the Global Climate Architecture. They noted that the initial phase of implementation involved upfront investment costs and significant institutional learning, with efficiency improving over time as capabilities, organization, and coordination strengthened. Most Directors agreed with the evaluation’s assessment that there is scope to further strengthen the application of the new climate approach, and supported the IEO’s key recommendations for improvement with some qualifications regarding specific suggestions. Noting that some of the challenges are common to many workstreams, Directors stressed the need for close alignment with current and upcoming workstreams, including the Comprehensive Surveillance Review (CSR), Review of Program Design and Conditionality, Financial Sector Assessment Program Review, and Review of the Resilience and Sustainability Trust (RST). Directors emphasized the need to take into consideration resource constraints and highlighted the resulting need for prioritization. While a few Directors considered that the climate strategy might have crowded out the Fund’s core work and the evaluation should have assessed its consistency with the Fund’s mandate, most Directors stressed the need for sustained institutional support to preserve the progress achieved with the new approach.
At the time of the 2005 Review of the Fund’s Transparency Policy, the Executive Board requested regular updates on trends in implementing the transparency policy. This report provides an overview of recent developments in implementation of the policy, reflecting information on documents considered by the Board in 2023 and updating the previous annual report on Key Trends issued in July 2024. Deeper analysis of these trends is undertaken in the context of periodic reviews of the Fund’s Transparency Policy.
On May 8, 2026, the IMF’s Executive Board approved another six-month extension of the period to consent to the quota increase and to the New Arrangements to Borrow (NAB) rollback under the Sixteenth General Review of Quotas (GRQ), through November 15, 2026. Such extension also extends the period of consent for quota increases under the Fourteenth GRQ. The previous deadline was due to expire on May 15, 2026. However, the Board of Governors Resolution No. 79-1 provides that the Executive Board may extend the period for consent as it may determine.
This paper updates the projections of the Fund’s income position for FY 2026 and FY 2027–2028 and proposes related decisions for the current and the following financial years. The paper includes proposed decisions to transfer SDR 1.38 billion of GRA resources to the Interim Placement Administered Account and to transfer estimated Fixed Income income and a payout from the Endowment Subaccount to help meet administrative expenses. It also includes a proposed decision to keep the margin for the rate of charge unchanged at 60 basis points for FY 2027–2028. The Fund’s total comprehensive income for FY 2026 is projected at about SDR 3.8 billion; reflecting an estimated pension-related remeasurement gain and retained income in the Investment Account. The Executive Board approved these decisions on April 28; 2026.
The global economic and financial environment is characterized by profound transformation and heightened uncertainty, including that stemming from the war in the Middle East. In this context, demand for Fund engagement is expected to remain strong, continuing to require difficult trade-offs within a real flat budget. The FY27-29 budget maintains a longstanding emphasis on discipline, focus, and agility in line with the evolving needs of the membership. Implementation of a Fund-wide streamlining exercise is reinforcing ongoing department-level prioritization to create space for the highest priority needs, relieve staff work pressures, and maintain capacity for unforeseen demands.
This paper examines the short- and medium-term effects of the 2018–19 China-U.S. tariff increases on the trade and investment flows of ASEAN member economies. Using granular trade data, we demonstrate that several ASEAN countries experienced a disproportionate growth in exports of products that were targeted by these tariffs. To further explore the dynamic and often immediate responses of international capital flows to these trade policy shifts, we leverage a novel firm-level FDI database that allows us to identify surges in sectoral investment inflows. Among ASEAN countries, Vietnam stands out as the one where FDI in targeted sectors grew notably faster during 2018–19, likely contributing to its observed export gains over the medium term. At the same time, our analysis reveals that trade gains in targeted products have not universally translated into stronger overall export performance across ASEAN. More generally, while trade reallocation may yield short- and medium-term gains, these gains can be offset over time by the higher long-term aggregate losses associated with trade fragmentation.
We quantify barriers to cross-border banking within the euro area and their consequences for credit allocation and output. Using loan-level data from the European credit registry (AnaCredit) and group structures (RIAD), we estimate barriers to relationship formation, loan pricing, and banks’ branching decisions at the country-pair level. We find that barriers to cross-border relationships between banks and firms and cross-border bank entry are large while wedges on interest rates and loan quantities are comparatively small. The estimated edges are strongly associated with differences in national banking regulations, measured using a novel dataset on regulatory distances. We embed our estimates into a quantitative spatial general equilibrium model with heterogeneous banks and firms subject to cross-border frictions in relationship formation, loan pricing, and bank entry. Partially relaxing frictions predicts sizable and heterogeneous output gains across euro area countries. These gains are primarily driven by increases in capital and labor rather than improvements in allocative efficiency.
This paper examines the drivers of wage growth in Europe and assesses whether the 2022–23 inflation surge has altered wage-setting dynamics, using cross-country macro evidence for 26 European economies, agreement-level collective bargaining data for Spain, and estimates of minimum and public sector wage spillovers. We find that the slope of the wage Phillips curve has not materially changed since the pandemic—labor market slack continues exerting a restraining influence on wage growth. However, postpandemic wage growth was higher than predicted by historical relationships, reflecting the outsized inflation shock and a higher sensitivity of wages to past inflation. Wage-setting is found to differ markedly across regions. In Central, Eastern, and Southeastern European Economies (CESEE), wage formation remains more backward-looking, with past inflation playing a dominant role, whereas in Advanced Economies (AEs) inflation expectations are more important. In AEs, the recent wage response followed a sequential pattern: the wage drift rose early as employers granted ad hoc increases, while negotiated wages adjusted with a lag as collective agreements were renewed and workers recouped accumulated real wage losses. Micro evidence from Spain shows that institutional features of collective bargaining conditionally amplify inflation pass-through: CPI indexation clauses, sector-level bargaining, and shorter contract duration are each associated with stronger wage responses to past inflation. In parallel, minimum wage pass-through has strengthened markedly in CESEE since 2015, while public sector wages dampened aggregate wage growth in AEs but amplified it in CESEE during 2022–24. Taken together, these findings suggest that while the core Phillips curve mechanism remains intact, future inflation shocks could generate more persistent wage pressures where wage-setting is more backward-looking, inflation compensation becomes institutionalized (including through indexation that interacts with downward nominal rigidity), or discretionary minimum and public sector wage policies add impetus.
Government securities-backed repo markets constitute a key funding source for market participants in many jurisdictions. A number of recent stress episodes, e.g., in US and UK repo markets, has led to renewed efforts to strengthen the resilience of repo markets. This notably includes a push to increased central clearing via central counterparties (CCPs) which may come via market incentives or in the form of mandatory clearing. Central clearing is commonly considered as a key tool to increase transparency and understanding of markets and improve the risk management practices of market participants. This paper provides a brief overview of post trade-arrangements in select government securities repo markets and offers a structured analysis of potential benefits and risks of bringing repo markets onto centrally cleared platforms from a CCP perspective. The paper lists a set of key considerations that CCPs—and indirectly—policy makers could take into account when exploring the expansion of repo clearing services or opting for a repo clearing mandate. Aside from considerations pertaining to access modalities to repo clearing services, default management and market structure-related aspects are of key importance. Together, these factors ensure that the transition of repo transactions from a decentralized, uncleared set-up to central clearing is conducive to more resilient repo and ultimately government bond markets.
Fiscal policy has re-emerged as a central tool of macroeconomic stabilization, yet the way governments communicate fiscal choices remains poorly understood. This paper provides the first systematic analysis of fiscal communication across the G7 from 2000–2024. Using a new dataset of budget documents, ministerial speeches, and press communiqués, we examine the clarity, thematic content, and rhetorical tone of official fiscal statements through computational text-analysis methods. We uncover a structured but fragmented communication architecture. Technical documents emphasize sustainability and constraints; speeches underscore growth, fairness, and investment; and press releases distill policy packages into succinct signals. Despite rising expectations of transparency, fiscal language remains complex and often optimistically framed. These patterns reflect institutional design, political incentives, and macroeconomic conditions. Our findings highlight fiscal communication as an underappreciated dimension of economic governance, one that shapes expectations, conditions credibility, and warrants deeper integration into fiscal policy analysis.
High-debt euro area economies face fiscal consolidation in a low-growth environment. We use a Heterogeneous Agent New Keynesian model to assess how consolidation composition shapes aggregate and distributional outcomes in a representative high-debt economy. The status quo is not neutral: delay generates its own costs through lower investment, higher debt service, and damage to constrained households. For a given fiscal effort, expenditure-based consolidation achieves faster debt reduction with lower growth and distributional costs than revenue-based consolidation. As a complementary exercise, pairing the expenditurebased path with growth-enhancing structural reforms further improves outcomes by lifting real wages, a channel that disproportionately benefits hand-to-mouth households. Across both strategies, modest well targeted transfers to low-income households can substantially mitigate distributional costs at minimal fiscal expense while supporting aggregate demand.
