Source: IMF

The Macro-Fiscal Impacts of Post-Disaster IMF Financing: Evidence from a Synthetic Control Approach

The IMF provides macro-stabilizing liquidity when others cannot. The IMF has developed a set of instruments designed to provide rapid financial assistance to countries facing urgent balance of payments needs without requiring a full-fledged economic program, triggered by exogenous natural disasters shocks. We evaluate the impact of IMF emergency financing after natural disaster using a synthetic control method. The results show that IMF post-disaster financing supports a faster GDP recovery, ...

Fiscal Decentralization and Cyclicality in Latin America: Evidence from a New Regional Budget Database

Using a newly constructed database of highly granular regional-level budgets, this paper documents the growing relevance of regional governments in Latin America over the past three decades and evaluates the implications for fiscal cyclicality. We find that regional governments exhibit lower revenue elasticity to national GDP than central governments, primarily due to the limited cyclicality of transfers. On the expenditure side, while overall elasticity is comparable to central governments, ...

Policy PaperMay 8, 2026

FY2027-FY2029 Medium-Term Budget

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 streamlini...

Policy PaperMay 8, 2026

Review of the Fund's Income Position for FY 2026 and FY 2027-2028

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 ...

Capital Holdup, Job Creation, and Skill Supply under Search Frictions

There has been renewed interest in revitalizing manufacturing, yet policy often confronts a circular challenge: firms hesitate to expand because they cannot reliably find suitably skilled workers (e.g., STEM-trained), while workers are reluctant to acquire those skills when jobs remain limited. This raises a policy question: intervene at the firm margin or the worker margin, or both? We study this question by extending Acemoglu and Shimer (1999) to a two-sector open-economy. The key friction ...

The Role of Budget Support in Growth and Adjustment: Evidence from One Hundred IMF-Supported Programs with Low-income Countries

The use of IMF credit for budgetary financing (budget support) has surged in Extended Credit Facility (ECF) arrangements with low-income countries (LICs) post pandemic, yet its role in growth and adjustment remains understudied. This paper provides the first systematic analysis of budget support across all 100 ECFs approved since the PRGT’s inception in 2010. We develop a reduced-form model that captures how budget support affects the growth-reserves trade-off, where budget support substitute...

Policy PaperMay 6, 2026

Applying the Integrated Policy Framework to Low-Income Countries: Shocks, Frictions, and Policy Considerations

The Integrated Policy Framework (IPF) assists IMF staff in providing advice on the joint use of foreign exchange intervention (FXI), macroprudential measures (MPMs), and capital flow management measures (CFMs), alongside standard monetary and fiscal policies. This note provides overarching considerations in applying the IPF to low-income countries (LICs), building on previous Fund advice.

Stress Tests of Euro Area Banks with Skewed Normal Credit Risk Distributions

This paper describes the 2023 euro area consultation top-down stress test that focused on the resilience of 91 systemically important banks’ capital buffers as of end-2022 to macro baseline and adverse scenarios over the period 2023-25. As a result, the paper is an illustration of a top-down stress test framework with an application to euro are banks. The 2023 euro area consultation top-down stress test included unbiased dynamic panel data estimators based on Lancaster (2002) for projecting p...

Granular Bank Shocks and Financial Intermediation in a Low-Income Economy

This paper studies how granular bank shocks propagate to aggregate credit in Mauritania’s banking system. Using confidential monthly data, we extract size-weighted innovations to lending growth and profitability. At the aggregate level, lending shocks are large and exhibit a near one-for-one mapping into monthly credit growth, accounting for roughly 80 percent of its short-run fluctuations. By contrast, profitability shocks are small, statistically insignificant, and contribute almost nothing...

When Forecasts Meet Reality: Assessing Climate Damage Functions

This paper assesses estimates of the economic impacts of climate change by leveraging the IMF’s World Economic Outlook (WEO) forecasts (1990-2023) as climate-free counterfactuals. Placebo tests confirm WEO forecasts do not capture climate effects. By adding climate damage estimates to forecasts and comparing with actual GDP growth, we find climate damage functions explain only a small share of forecast errors—reducing mean absolute errors by up to 0.4 percentage points (about 6% of the foreca...

Public Administration Digitalisation and Microenterprise Productivity in India

We find that public administration digitalisation, carried out state-by-state in India between 2010 and 2015, led to an improvement in micro-enterprise productivities, based on the Unincorporated Non-Agricultural Enterprises Surveys. We categorise the digitalisation of public administration into six groups: tax filing and payments, construction permits, environment and labour regulations, inspections, commercial disputes, and single-window systems. States are ranked according to the subsets o...

Fiscal Policy and Labor Market Outcomes in Europe: Are the Balkans Different?

The macroeconomic effects of fiscal policy are central to both research and policymaking, yet relatively little is known about how fiscal shocks impact men and women differently across diverse labor market and institutional contexts. This paper provides the first comparative analysis of gender-specific responses to exogenous fiscal shocks in the Balkans relative to the rest of Europe. Using a cross-country panel dataset and the local projection method, we trace the dynamic effects of fiscal e...