IMF Working Papers

The Impact of the IMF’s COVID-19 Support to Developing and Emerging Economies

By Sumin Chun, Karmen Naidoo, Nelson Sobrinho

December 16, 2022

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Sumin Chun, Karmen Naidoo, and Nelson Sobrinho. The Impact of the IMF’s COVID-19 Support to Developing and Emerging Economies, (USA: International Monetary Fund, 2022) accessed November 13, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We construct a high-frequency dataset that combines information on all IMF lending and proxies of monthly economic activity during the first two years of the COVID-19 pandemic (2020–21). Using this novel dataset and standard econometric techniques we find a positive and significant marginal effect of IMF financing on economic activity in low-income countries (LICs) and emerging market economies. We also present tentative evidence that IMF financing may have helped economic outcomes by easing fiscal budget constraints, allowing for larger government spending in response to the pandemic. Overall, this evidence suggests that IMF financing helped lessen the negative impacts of the pandemic on economic activity, especially in LICs.

Keywords: COVID-19 pandemic, Developing countries, Economic recovery, Emerging economies, External financing, IMF lending, Mobility, Nighttime lights

Publication Details

  • Pages:

    61

  • Volume:

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  • DOI:

    ---

  • Issue:

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  • Series:

    Working Paper No. 2022/261

  • Stock No:

    WPIEA2022261

  • ISBN:

    9798400229114

  • ISSN:

    1018-5941