The IMF’s concessional support for low-income countries (LICs) is provided primarily through the Poverty Reduction and Growth Trust (PRGT). Since the start of the pandemic, lending from the PRGT has risen very sharply in response to the unprecedented and urgent needs of LICs; total PRGT credit outstanding nearly doubled during 2020 to far exceed past peaks.

Given the likelihood that these needs will continue to rise and persist for many years, there is an urgent need to ensure that the PRGT has adequate resources to face this challenge. Resources are also needed to ensure that the cancellation of debt service payments for a subgroup of the most vulnerable LICs that began in April 2020 can be extended for the maximum period of two years provided for under the IMF’s Catastrophe Containment and Relief Trust (CCRT).

This note considers possible financing sources, taking into account legal, political, and practical constraints including the timeliness with which different resources could be mobilized.

Report by the Centre for Global Development