Low-Income Countries

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What has the IMF done to help low-income countries during the coronavirus pandemic?
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.
Factsheet: Fund Concessional Support for Low-Income Countries—Responding to the Pandemic, July 2021
The IMF Executive Board Concludes Fifth Review of the Extended Fund Facility Arrangement for Ecuador
April 22, 2026
The IMF Executive Board completed the fifth review under Ecuador’s 48-month Extended Fund Facility (EFF) arrangement, enabling an immediate disbursement of about US$400 million.
IMF Staff Reaches Staff Level Agreement with Armenia on the First Review of the Stand-By Arrangement
April 17, 2026
IMF Staff Reaches Staff Level Agreement with Armenia on the First Review of the Stand-By Arrangement
Chair’s Statement Fifty-Third Meeting of the IMFC
April 17, 2026
The global economy has been tested by repeated shocks over the past few years from wars and conflicts, including the new one in the Middle East. In addition to its humanitarian impacts, the economic effect is global, and it will once again hit the poorest and most vulnerable the hardest. This comes at a time when policy space has eroded and international cooperation is weaker. The appropriate policy response depends on how the shock propagates through the domestic economy, calling for timely and adaptable policies backed by credible frameworks and international cooperation. Ending wars and conflicts and securing lasting peace around the world remains essential for sustainable growth and long-term stability.
IMF Announces Resumption of Dealings with Venezuela
April 16, 2026
Washington, DC – April 16, 2026: Guided by the views of International Monetary Fund (IMF) members representing a majority of the IMF’s total voting power, and consistent with long standing practice, the Managing Director Kristalina Georgieva today announced that the IMF is now dealing with the Government of Venezuela, under the administration of acting President Delcy Rodríguez.
IMF Management Approves a Staff Monitored Program for Zimbabwe
April 16, 2026
IMF Management Approves a Staff Monitored Program for Zimbabwe
Introductory Remarks at the IMF’s Middle East and Central Asia Department Press Briefing
April 16, 2026
In this speech launching the IMF’s April 2026 Regional Economic Outlook for the Middle East and Central Asia, Jihad Azour, Director of the Middle East and Central Asia Department, highlights how the outbreak of war has delivered a severe and multifaceted shock to one of the world’s most strategically important economic corridors, disrupting three pillars of stability: energy markets, trade routes, and business confidence. Given the extraordinary uncertainty surrounding the conflict’s duration and intensity, the analysis presents a reference scenario alongside adverse alternatives to help frame the risks.
Africa Faces Mounting Risks Just as Growth Gains Take Hold
April 23, 2026
To weather the shock, policymakers should ensure that any near-term measures are time-bound and targeted at the most vulnerable, and maintain the focus on medium-term development objectives
How the Middle East War Has Affected Oil Exporters and Importers
April 22, 2026
Countries face vastly different exposure to higher oil prices and supply uncertainty, shaped by whether they import or export, and how much policy space they have to respond
The Middle East War Will Have an Uneven Impact on the Western Hemisphere
April 17, 2026
Impact on economic activity will vary across countries, but inflation will rise for all
Reforming Europe Under Pressure
April 17, 2026
The region must respond to energy shocks through disciplined policies that protect the vulnerable and strengthen resilience
Asia's Economic Resilience Is Being Tested by the Energy Shock
April 16, 2026
The region can best cope by protecting vulnerable people, letting prices adjust, anchoring inflation expectations, and accelerating structural reforms
War Shock Requires Disciplined Fiscal Reaction
April 15, 2026
Middle East conflict intensifies global uncertainty at a time of strained public finances, underscoring the need for policies that preserve future stability
The Managing Director's Written Statement: The Managing Director's Written Statement
April 23, 2026
The world faces the spillovers from the war in the Middle East. In addition to the human toll, its economic effects are global and uneven, once again hitting the poorest and most vulnerable countries the hardest. This comes at a time when policy space has been eroded and geopolitical tensions have been increasing. Spillovers to Low-Income Developing Countries (LIDCs) will transmit through supply disruptions, higher commodity prices, second-round effects on inflation and expectations, tighter global financial conditions, exchange rate pressures, and reduced remittances from members of the Gulf Cooperation Council (GCC). The appropriate policy response depends on how the shock propagates through the domestic economy, calling for pragmatism and agility, supported by credible policy frameworks. In LIDCs, near term policies should be anchored in credible frameworks, while concerted efforts are key to enhance resilience and growth potential. Domestic structural reforms, including building strong institutions, also have an important role in the medium-term to attract stronger FDI inflows and create jobs. Robust support from the international community will be essential—especially for the most vulnerable LIDCs and fragile and conflict-affected states (FCS). The IMF stands ready to deploy all its tools to assist the membership—supporting sound policies, helping ensure this new test does not derail key medium-term priorities, and providing balance of payments financing where needed.
Progress Report to the IMFC on the Activities of the Independent Evaluation Office of the IMF
April 17, 2026
Since the 2025 Annual Meetings, the Independent Evaluation Office (IEO) completed
its evaluation on IMF Advice on Fiscal Policy and announced plans to launch evaluations of “IMF
Advice on Monetary Policy” and “Political Economy Considerations in IMF Work.” The IEO is also
progressing on its ongoing evaluations of “The IMF and Climate Change” and “IMF Engagement
on Debt Issues in Low-Income Countries.”
The Managing Director's Global Policy Agenda Spring Meetings 2026: Managing Shocks and Transformations
April 15, 2026
The world faces the spillovers of a new war. In addition to the human toll, the economic effects of the war in the Middle East are global, and will once again hit the poorest and most vulnerable countries the hardest. This comes at a time when policy space has eroded and international cooperation is weaker. The appropriate policy response depends on how the shock propagates through the domestic economy, calling for pragmatism and agility, backed by credible policy frameworks. The IMF stands ready to deploy all its tools to assist the membership. We will support good policymaking—advising also that this new test must not derail essential medium-term priorities—and provide balance of payments financing where needed.
Review of the Adequacy of the Fund's Precautionary Balances
April 10, 2026
On March 20, 2026 the Executive Board of the International Monetary Fund (IMF) concluded the 2026 Review of the Adequacy of the Fund’s Precautionary Balances. This review took place on the standard two-year cycle, following the 2024 Review. An interim assessment of precautionary balances was conducted within the Review of the Fund’s Income Position for FY2025 and FY2026, concluded in April 2025 (2025 Update). Precautionary balances comprise the Fund’s general and special reserves. They are a key element of the IMF’s multi-layered framework for managing financial risks. Precautionary balances provide a buffer to protect the Fund against potential losses, resulting from credit, income, and other financial risks. In conducting the review, the Executive Board applied the rules-based framework agreed in 2010 and reaffirmed in 2024.

Precautionary balances have continued to increase since reaching the SDR 25 billion medium-term target at the end of FY2024. The overall balance of risks and risk mitigants to the Fund remain broadly unchanged since the 2025 Update. Precautionary balances are expected to remain above the target, including assuming additional distributions to the Interim Placement Administered Account (IPAA) in coming years. Against this background, Executive Directors endorsed staff’s proposal to retain the current medium-term target of SDR 25 billion and the minimum floor of SDR 20 billion.
Understanding Global Imbalances
April 6, 2026
Against the backdrop of persistent and recently widening global imbalances, the paper presents a structured framework for understanding how domestic policies can influence current account positions by altering domestic saving and investment decisions. Staff analysis finds that traditional macroeconomic policies remain the dominant drivers of imbalances, but certain types of industrial policies could also play a role. Micro industrial policies—those targeting specific sectors or firms—generally have ambiguous and limited effects on the current account depending on their impact on aggregate productivity. Macro industrial policies—those deployed economy-wide and often paired with restrictions such as capital flow management measures—can materially affect the current account but come at a cost to consumption. Trade restrictions, often deployed to counter imbalances, would only meaningfully alter current account balances when used temporarily or to support higher public savings.

Using scenario analysis, the paper shows how domestic rebalancing, undertaken simultaneously, across deficit and surplus economies yields both a reduction in global imbalances and higher global output. The report concludes that the future path of global imbalances will be largely shaped by domestic macroeconomic trajectories. Durable rebalancing is a collective endeavor: it requires sound domestic policy action across major economies and works best when countries move together. To help design such policies, the Fund is pursuing a multipronged approach by strengthening data, analysis, surveillance and dialogue across the member countries.
Macroeconomic Developments and Prospects in Low-Income Countries—2026
March 31, 2026
Low-income countries (LICs) are navigating a highly uncertain global environment shaped by shifting policies in major economies. Changes in trade, migration, spending priorities, and foreign aid are affecting LICs directly and indirectly. While lower food and energy prices and a weaker dollar have provided some relief, cuts in official development assistance are already weighing on many LICs, and tighter immigration policies could weaken remittance inflows going forward. Macroeconomic outcomes also remain highly divergent: growth is projected to rise from 4.8 percent in 2025 to 5.3 percent in 2026, but many LICs still face weak per capita income growth, high debt service burdens, thin reserve buffers, and tighter financing conditions.
Building resilience and reinvigorating growth remain urgent. This agenda calls for continued fiscal consolidation in most LICs, with pace and calibration tailored to country circumstances, and supported by stronger domestic revenue mobilization, expenditure prioritization, and improvements in public financial and debt management. Monetary and exchange rate policies must remain focused on durably restoring price stability while safeguarding financial stability. At the same time, structural reforms to strengthen governance, improve institutional quality, and support private sector-led growth and job creation will be critical to rebuilding buffers and raising productivity. The paper also emphasizes that stronger macro-fiscal management and fiscal institutions can help attract more and higher-quality foreign direct investment by reducing policy uncertainty and improving investors’ risk-adjusted returns. By contrast, fiscal incentives should be used selectively and only where fiscal discipline and institutional capacity are already strong. International support, including concessional financing, capacity development, and IMF engagement, will remain critical, with scarce concessional resources best prioritized toward the poorest and fragile LICs.
Military Spending and Crowding-Out Effects: Evidence from Sub-Saharan Africa
April 10, 2026
This paper quantifies the effects of increases in military expenditures on education and health spending using local projections and different strategies to identify exogenous changes in military spending based on data for 33 sub-Saharan African (SSA) economies over the period 1990-2023. Specifications with shocks identified through military spending surges and through a fiscal reaction function yield mixed results that typically are neither economically nor statistically significant. But instrumental variables estimates that tackle endogeneity concerns indicate that a one-standard-deviation increase in the share of military spending in total government expenditure reduces the shares of education and health spending by about 1 percentage point over the medium-term. The crowding-out effects tend to materialize sooner for health expenditures, likely because they have a larger discretionary component, while education spending is marked by rigidities. In addition, we find that military spending shocks tend to crowd-out health expenditures when access to international aid is limited, while there is no evidence of crowding-out when aid is relatively amply available. In contrast, it appears that overall debt levels and the state of the business cycle are not significant factors in determining the extent of crowding-out effects of military expenditure.
Welfare Analysis of Income-Stabilization Policies in a HANK Model with Unemployment Risk
April 10, 2026
Understanding how policies can stabilize household welfare during recessions requires a framework that captures household heterogeneity, unemployment risk, and general-equilibrium labor market dynamics. We study a contractionary demand shock in a Heterogeneous-Agent New-Keynesian model with search-and-matching friction on the labor market (HANK–SAM) and compare the effectiveness of alternative income-stabilization policies. Using a common fiscal envelope, we contrast increases in unemployment insurance generosity, with targeted transfers to hand-to-mouth households, and universal transfers. Policy effectiveness is assessed through the aggregate consumers’ welfare, measured in consumption-equivalent variation units. In an economy calibrated to U.S. data, unemployment insurance yields the largest welfare gain per percentage point of fiscal cost, followed by targeted transfers, while universal transfers are the least effective. A temporary increase in unemployment insurance generates the highest welfare, as it combines immediate cash-flow support with insurance effects, disproportionally benefiting households with high marginal propensities to consume.
Benchmarking Dynamically Stable Public Debt Trajectories for Low-Income Countries
April 10, 2026
In this paper, we develop two complementary approaches for benchmarking the public debt trajectories of Low-Income Countries (LICs) to assess their dynamic stability. We compare the evolution of the overall public debt-to-GDP ratios of reference LICs with the historical experiences of other countries with similar characteristics, which are now further down the path of economic development and have not experienced public debt stress events. We rely on both direct comparison and a novel application of the synthetic control method (SCM). These public debt trajectories that are dynamically stable from a historical perspective can provide insights into debt sustainability analyses for LICs.
Wagner in the Balkans? A Comparative Analysis of Government Size and Economic Growth
April 10, 2026
Determining the appropriate size of government remains central for fiscal sustainability, social protection, and macroeconomic stability. Wagner’s law, formulated in the 19th century, posits that government expenditures rise with income, yet contemporary evidence is mixed. This paper revisits the relationship between economic growth and government spending in Europe over the period 1990–2024, with particular attention to the Balkans. Using an instrumental variable strategy based on trade-weighted partner growth, we find no evidence that rising income systematically expands government expenditure. On the contrary, faster growth is associated with modest declines in expenditure, particularly for current spending, while capital outlays remain largely unaffected. These patterns are stronger in high-debt countries, suggesting that fiscal rules and debt constraints increasingly shape spending decisions. The Balkan economies largely follow these trends, though heterogeneity reflects transition dynamics and EU integration. Our findings imply that Wagner’s law no longer describes spending behavior in modern European economies. Policymakers should focus less on income-driven expenditure growth and more on strengthening fiscal frameworks, improving spending efficiency, and prioritizing high-return investments in infrastructure and human capital. These measures can enhance fiscal resilience while supporting public service provision and long-term development goals.
Digital Treasury Reform and Fiscal Efficiency: Evaluating Costa Rica’s SUPRES Platform Adoption
April 10, 2026
This paper evaluates the impact of Costa Rica’s adoption of SUPRES, a digital treasury platform that centralizes and automates cash transfer payments for social assistance programs. While most GovTech literature has focused on service delivery improvements, the effects of digitalization on treasury operations remain largely unexplored. Addressing this gap, we provide an empirical assessment of how GovTech reforms support treasury efficiency by improving cash management and reducing opportunity costs of borrowing for treasury. Using administrative data and survey evidence, this analysis finds that average lead times for the analyzed social cash programs fell with the adoption of SUPRES - from 9–13 days before the reform to 2-3 days after-, generating estimated opportunity cost savings for the Treasury exceeding USD 4 million, at a relatively low implementation cost, highlighting the strong value-for-money of this reform. In 2020, the pre-SUPRES opportunity cost was about 1.1% of total domestic short-term interest payments, underscoring the importance of digital treasury reforms for managing liquidity. Although the savings are modest compared to GDP, they are significant for treasury operations, especially during tight cash periods. Survey responses from administrative staff indicate enhanced operational efficiency, transparency, and inter-institutional coordination following SUPRES adoption. Beyond treasury efficiency gains, the reform also strengthens targeting, expands financial inclusion, and supports the diversification and resilience of the social payments ecosystem by enabling a multi‑bank payment model. Overall, the analysis shows how relatively low‑cost digital treasury reforms can deliver meaningful efficiency gains in cash management while generating broader operational and financial inclusion benefits.
Bank Lending Margins and The Exchange Rate Uncertainty Channel
April 10, 2026
Uncertainty in the foreign value of the US dollar affects the US banking sector and therefore, the US real economy. In this paper, I propose a novel ‘Exchange Rate (ER) Uncertainty Channel’ and show the effects of increased volatility in the trade-weighted US dollar index on the US banking sector. Higher volatility in the exchange rate leads to retrenchment by foreign banks from the US syndicated loans market (SLM). This entails a loanable funds supply bottleneck for US banks trying to finance their loans through syndicates. US banks respond with tighter credit standards in an attempt to re-allocate scarce funds. In response to a 1 standard deviation increase in ER volatility, US banks’ net interest margin increase by 10 bps annualized, whereas balance sheet contract by 2-3 pp annualized. This is consistent with banks exerting market power in the loan market while simultaneously shrinking their balance sheet. Both the price and volume effects are stronger for US banks with greater exposure to the SLM as measured by their loans-to-interest-earning-assets ratio. Thus, volatility in the US dollar is a ‘global risk indicator’ that significantly affects US banking lending activity.
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FCDO/IMF Project
The IMF has partnered with the UK's Foreign, Commonwealth and Development Office (FCDO) to study critical macroeconomic policy issues in low-income countries to promote sustainable and inclusive growth in low-income countries.
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