IMF review calls for 'fewer but deeper' reforms in design of loan programs
SPY•The IMF called for targeted changes to its loan programs, including fewer but deeper reforms, better risk assessment and more realistic project financing. Its review covered IMF-supported programs from January 2018 through December 2024.
1. Recommendations for loan programs
The IMF called for targeted refinements to the design and implementation of its loan programs, including a focus on fewer but deeper reforms. Its executive board backed recommendations for more balanced reforms, better risk assessment and greater realism about project financing.
2. Fiscal adjustments and new tools
The recommendations encourage more front-loaded and sustained fiscal adjustments, which the IMF said are associated with a higher chance of program success. The fund said such adjustments should be made only to the extent feasible, alongside realistic growth measures and adequate social spending to protect vulnerable people. It is also introducing a tool to identify, sequence and tailor medium-term structural reforms.
3. Critics raise concerns
Civil society groups have worried the review could leave developing countries facing stiffer austerity measures. Jubilee USA Network executive director Eric LeCompte said previous financial policies and debt reviews had not been adequate to keep countries out of crisis.
