 "IMF, International Monetary Fund")
As part of its “Global Policy Agenda” unveiled at Marrakesh, the International Monetary Fund (IMF) has called for urgent support from members to increase its quota resources and to secure funding for the Poverty Reduction and Growth Trust (PRGT) and Resilience and Sustainability Trust (RST) to benefit the poorest members.
The PRGT and RST are concessional lending facilities of the IMF. However, while the PRGT is available to low-income countries that are eligible for the IMF’s concessional financing for poverty reduction, the RST is a newer facility, established in 2021, to help low-income and vulnerable middle-income countries build resilience to climate change and other external risks.
“To be able to continue support for our poorest and most vulnerable EMDEs (emerging market and developing economies), we rely on our economically stronger members to close the remaining subsidy funding gap for the PRGT. To date, more than $40 billion in resources has already been pledged to the RST, and — pending a successful review of the RST — we encourage members to scale up their efforts, including by raising the ambition of economically stronger members beyond the target of rechanneling 20 per cent of the 2021 SDR (special drawing rights) allocation,” the report said.
The IMF said the global economy had shown resilience, but recovery was slow and uneven.
“Medium-term global growth projections remain weak in an environment of fragmented trade, high debt levels, and possibly higher-for-longer interest rates. Risks to the outlook are more balanced, following strong policy action in early 2023 to contain banking sector turbulence. But Russia’s war against Ukraine, the climate crisis, and inflation persistence in some areas remain concerns for the global economy,” it added.
The multilateral lending agency said the key policy priorities for member countries were to safeguard macroeconomic stability, rebuild buffers while enhancing prosperity through growth-oriented, green reforms, and bolster international cooperation to strengthen the global financial safety net (GFSN) and debt architecture.
To preserve macroeconomic stability, the IMF said central banks should continue to focus on durably restoring price stability while calibrating policies in a data-dependent manner.
“Although there is now more differentiation across countries, for many, this will require maintaining a tight monetary stance and avoiding prematurely easing policy. Effective communication of policy objectives is essential for (minimising) the output costs of disinflation,” it added.
In a separate joint statement, World Bank President Ajay Banga and IMF Managing Director Kristalina Georgieva said the existential threat posed by climate change, growing disparities in income and opportunities, and geopolitical tensions were intensifying.
“Rapid (digitalisation) and technological transformations create new challenges, but also opportunities, and no country should be left behind,” they added.
They called for decoupling growth from climate risks by developing capacities to manage and implement cost-effective strategies for disaster risk reduction and planning, enabling construction and maintenance of climate- and disaster-shock resilient infrastructure, strengthening regional efforts against ecological challenges that might lead to forced migration, including by preserving biodiversity, and promoting sustainable land and water management practices.
Both Banga and Georgieva asked countries to support transformational reforms and modernise global cooperation; strengthen the international monetary system to respond to countries’ needs; and facilitate cross-border trade, payments, and investment flows. They also urged them to strengthen the multilateral trading system to support global economic cooperation and growth by ensuring that it was rules-based, non-discriminatory, fair, open, inclusive, sustainable, and transparent with effective dispute resolution mechanisms.
