Low-Income Countries


Russia’s war in Ukraine and the related fallout have created a challenging external environment for the post-pandemic recovery of low-income countries (LICs). Food and commodity prices linger at elevated level with worsening food security. Global financial conditions tighten as major economies are fighting against inflation. The delay in LICs’ income per capita convergence to that of advanced economies (AEs) is expected to last into the medium term.

Support for LICs


AI Will Transform the Global Economy. Let’s Make Sure It Benefits Humanity.
January 14, 2024

AI will affect almost 40 percent of jobs around the world, replacing some and complementing others. We need a careful balance of policies to tap its potential

Harm From ‘De-Risking’ Strategies Would Reverberate Beyond China
October 17, 2023

The negative impact of ‘de-risking’ strategies by major economies would be felt beyond China, while comprehensive reforms in China could generate significant positive spillovers

How Financing Can Boost Low-Income Countries’ Resilience to Shocks
June 14, 2023

The economic gains from $272 billion in pandemic support for 94 countries were strongest in the poorest and more vulnerable recipients of IMF concessional financing

Fiscal Policy Can Help Tame Inflation and Protect the Most Vulnerable
April 3, 2023

Smart fiscal policy can help restore price stability and lessen the impact of the cost-of-living crisis.

The Time Is Now: We Must Step Up Support For the Poorest Countries
March 31, 2023

Low-income countries face huge economic challenges and financing needs. They rely on international institutions, including the IMF’s Poverty Reduction and Growth Trust, for vital policy and financial support. Economically stronger countries have a responsibility to contribute to the funding of this support.

Africa’s Rapid Economic Growth Hasn’t Fully Closed Income Gaps
September 21, 2022

Despite decades of rapid growth, regional inequalities in sub-Saharan Africa persist. 

Policy Papers

The Fund’s Income Position for FY 2023— Actual Outcome
November 17, 2023

This paper reports on the Fund’s income position for FY 2023 following the closing of the Fund’s accounts for the financial year and completion of the external audit. Overall net income of the General Department was SDR 1.7 billion, SDR 0.1 billion lower than estimated in April, mainly reflecting a decrease in the remeasurement gain reported under IAS 19 (the accounting standard for employee benefits) offset partly by higher-than-anticipated returns from the investment subaccounts compared with earlier projections.

Review of the Fund’s Income Position for FY2023 and FY2024
June 16, 2023

This paper updates the projections of the Fund’s income position for FY 2023 and FY 2024 and proposes related decisions for the current and next financial year. The paper also includes a proposed decision to keep the margin for the rate of charge unchanged for financial year 2024. The Fund’s overall net income for FY 2023 is projected at about SDR 1.8 billion, slightly lower than the April 2022 estimate.

Review Of The Adequacy Of The Fund’s Precautionary Balances
December 20, 2022

On December 12, 2022, the IMF’s Executive Board reviewed the adequacy of the Fund’s precautionary balances. The review took place on the standard two-year cycle, after an interim review in December 2021. 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. Precautionary balances have risen further since the 2021 interim review and coverage metrics have strengthened. At the same, credit and other financial risks have also increased. The pace of reserve accumulation is expected to remain adequate. 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 15 billion. The Board also discussed the role of surcharges, which are primarily a component of the Fund’s risk management framework but also contribute to reserves accumulation.

The Fund’s Income Position for FY 2022—Actual Outcome
December 16, 2022

This paper reports on the Fund’s income position for FY 2022 following the closing of the Fund’s accounts for the financial year and completion of the external audit.

Macroeconomic Developments and Prospects in Low-Income Countries - 2022
December 8, 2022

Russia’s war in Ukraine and the related fallout have created a challenging external environment for the post-pandemic recovery of low-income countries (LICs). Food and commodity prices linger at elevated level with worsening food security. Global financial conditions tighten as major economies are fighting against inflation. The delay in LICs’ income per capita convergence to that of advanced economies (AEs) is expected to last into the medium term.

Guidance For The Investment Of Temporary Resources To Generate Income To Contribute To PRG, PRG-HIPC, And CCR Trusts Assets
November 7, 2022

In July 2017, the Executive Board adopted a decision (hereinafter the ”Decision”) regarding the investment of resources provided to the Poverty Reduction and Growth Trust (“PRG Trust”) and other trusts on a temporary basis with the purpose of generating income for the operations of these trusts (“temporary resources”). This paper proposes that the Decision be amended to clarify that those temporary resources invested under the third option for PRG Trust contributors will be centralized in the Deposit and Investment Account (DIA).

Research & Publications

Who Pays the Bill? Distributional and Fiscal Consequences of Elevated Inflation in Thailand
February 2, 2024

This paper analyzes the distributional impacts of inflation in Thailand. For that aim, the paper uses rich micro-survey data on 46,000 Thai households to study the effect of the recent elevated inflation on poverty, its distributional effects on different income levels, and the fiscal cost to compensate households from real income losses. To study the multidimensional impact of inflation, the paper also studies how inflation differentially affects households through the consumption, income, and wealth channel. The analysis shows that under a baseline scenario, poverty in Thailand could increase by 1.3 percentage points—about 900,000 people—in the absence of government intervention. Targeted fiscal support to only compensate households that are below the national poverty line from rising inflation amount to 0.05 percent of GDP. However, fiscal support to compensate relatively rich households, defined as those above the median of the income distribution, amount to 1.4 percent of GDP. Moreover, due to high levels of debt, richer households benefit from inflation relative to poorer households. Finally, the paper also delves into policy responses undertaken by the Thai government and Asian and emerging economies to mitigate elevated inflation.

The Leisure Gains from International Trade
January 19, 2024

The average number of hours worked has been declining in many countries. This can be explained if workers have preferences with income effects outweighing substitution effects. Then, an optimal response to rising income is to reduce labor supply to enjoy more leisure. In this paper, I develop a novel structural link between trade and aggregate labor supply. Using a multi-country Ricardian trade model, I show that reducing trade barriers leads to fewer hours worked while being compatible with an increase in welfare. In addition, I derive an hours-to-trade elasticity and estimate it by exploiting exogenous income variation generated by aggregate trade. On average, I quantify that the rise in trade openness between 1950 and 2014 explains 7 percent of the total decline in hours per worker in high-income countries.

Automation and Welfare: The Role of Bequests and Education
January 12, 2024

This paper examines the welfare effects of automation in neoclassical growth models with and without intergenerational transfers. In a standard overlapping generations model without such transfers, improvements in automation technologies that would lower welfare can be mitigated by shifts in labor supply related to demographics or pandemics. With perfect intergenerational transfers based on altruism, automation could raise the well-being of all generations. With imperfect altruism, fiscal transfers (universal basic income) and public policies to expand access to education opportunities can alleviate much of the negative effect of automation.

Flattening the Curve and the Flight of the Rich: Pandemic-Induced Shifts in US and European Housing Markets
December 22, 2023

The pattern of increasing suburban house prices relative to urban centers initiated during the pandemic continues to hold across the top 30 US metropolitan statistical areas (MSAs). In contrast, European countries such as Denmark, France, and the United Kingdom did not experience a similar shift in valuations. We posit and find supporting evidence that these divergent patterns partially due to differences in the characteristics of suburban areas, particularly in terms of household income and property sizes; with European suburbs being relatively poorer and characterized by smaller housing units. We show that, in the US, MSAs with suburban features more akin to those in European cities generally experienced little to no increase in suburban housing prices compared to their urban centers. Finally, our findings indicate that migration patterns of the high-income population might have partially influenced the urban-suburban revaluation in the US.

Divided We Fall: Differential Exposure to Geopolitical Fragmentation in Trade
December 22, 2023

This paper assesses differences in countries’ macroeconomic exposure to trade fragmentation along geopolitical lines. Estimating structural gravity regressions for sector-level bilateral trade flows between 185 countries, we find that differences in individual countries’ geopolitical ties act as a barrier to trade, with the largest effects concentrated in a few sectors (notably, food and high-end manufacturing). Consequently, countries’ exposure via trade to geopolitical shifts varies with their market size, comparative advantage, and foreign policy alignments. Introducing our estimates into a dynamic many-country, many-sector quantitative trade model, we show that geoeconomic fragmentation—modelled as an increased sensitivity of trade costs to geopolitics and greater geopolitical polarization—generally leads to lower trade and incomes. However, emerging markets and developing economies (EMDEs) tend to see the largest impacts: real per-capita income losses for the median EMDE in Asia are 80 percent larger, and for the median EMDE in Africa 120 percent larger, than for the median advanced economy. This suggests that the costs of trade fragmentation could fall disproportionally on countries that can afford it the least.

Household Debt and Borrower-Based Measures in Finland: Insights from a Heterogeneous Agent Model
December 15, 2023

We analyze the effects of borrower-based macroprudential tools in Finland. To evaluate the efficiency of the tools, we construct a heterogeneous agent model in which households endogenously determine their housing size and liquid asset levels under two types of borrowing constraints: (i) a loan-to-value (LTV) limit and (ii) a debt-to-income (DTI) limit. When an unexpected negative income shock hits the economy, we find that a larger and more persistent drop in consumption is observed under the LTV limit compared to the DTI limit. Our results indicate that although DTI caps tend to be unpopular with lower income households because they limit the amount they can borrow, DTI caps are beneficial even on distributional grounds in stabilizing consumption. Specifically, DTI caps mitigate the consumption decline in recessions by restricting high leverage, and thus, they can usefully complement LTV caps.


Promoting Climate-Resilient and Green Development in Africa | Africa Perspectives
February 7, 2023

A conversation on how sub-Saharan Africa can promote climate-resilient and green development. African Department director Abebe Aemro Selassie hosts the premiere episode of Africa Perspectives.

Zambia: Towards a More Resilient and Inclusive Future
February 1, 2023

A discussion with University of Zambia students on how Zambia is making progress in its reform efforts to restore sustainability, invest in youth, combat corruption, and attract investment and the role of the IMF.

Strengthening Institutions for Sustainable Growth in the Post-COVID World
January 6, 2023

The conference provides an opportunity to discuss how South Asia can build on its development success in the aftermath of the COVID-19 pandemic and geopolitical tensions to achieve its potential.

The Resilience and Sustainability Trust - A Dialogue with Countries
December 13, 2022

A discussion on how the Resilience and Sustainability Trust fits wider climate objectives at the country and global level.

Regional Economic Outlook for the Middle East and North Africa, October 2022
November 2, 2022

Jihad Azour, Director of the Middle East and Central Asia Department, presents the IMF’s latest economic outlook and growth projections for the MENA region

Living on the Edge: IMF Outlook for sub-Saharan Africa Nairobi Launch
November 1, 2022

A presentation and discussion of the October 2022 Regional Economic Outlook for Sub-Saharan Africa.


The Infrastructure Seminar series provides a forum for leading experts to share latest insights on key policy issues related to public infrastructure.
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Developing Economies Seminars

Developing Economies Seminars
A flagship seminar at the Fund, the Developing Economies Seminar Series focuses on topical policy issues for developing countries.
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FCDO/IMF Project

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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