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The Macro-Fiscal Impacts of Post-Disaster IMF Financing

Year: 2026

Type: article

Abstract: The IMF provides macro-stabilizing liquidity when others cannot. The IMF has developed a set of instruments designed to provide rapid financial assistance to countries facing urgent balance of payments needs without requiring a full-fledged economic program, triggered by exogenous natural disasters shocks. We evaluate the impact of IMF emergency financing after natural disaster using a synthetic control method. The results show that IMF post-disaster financing supports a faster GDP recovery, with an implied average IMF post-disaster multiplier larger than 1. The findings suggest strong liquidity and catalytic effects, enabling countercyclical fiscal responses. However, the resulting increase in public debt underscores the need for credible medium-term fiscal plans and post-disaster consolidation to maintain debt sustainability.

Source: IMF Working Paper

DOI: 10.5089/9798229046800.001

Authors: Pedro Juarros, Junko Mochizuki

Language: English

Topic: Global Financial Crisis and Policies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Partnerships for the goals, Decent work and economic growth, No poverty

Open Access status: diamond

OpenAlex ID: W7160637130

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