Development Committee: The Managing Director's Written Statement

The global economy has weathered the latest in a series of shocks better than expected, but outcomes have diverged across countries. Resilience should not be taken for granted—there is no room for complacency in a rapidly changing world marked by heightened uncertainty, profound structural transformations, and significant vulnerabilities. The further erosion of buffers also calls for caution. Many low-income developing countries (LIDCs) and fragile and conflict-affected states (FCS) remain particularly vulnerable, facing higher food and energy import costs, high debt sustainability risks, tighter global financial conditions, and declining official assistance. Policymakers must deploy tools at their disposal within credible fiscal and monetary frameworks to safeguard macroeconomic and financial stability, and deliver reforms that foster private-sector dynamism, growth, and prosperity. While more challenging at a time of geoeconomic fragmentation, fostering international cooperation remains essential to manage cross-border risks and bolster global stability. For LIDCs and FCS, addressing gaps in institutions and governance, infrastructure, skills, and technology readiness will be particularly important to ensure that private investment and technological change translate into broader growth rather than widening income gaps. In this more complex environment, the IMF is prepared to act decisively and deploy all its tools in support of the membership. We are also updating and upgrading our surveillance, lending framework, and capacity development (CD) to better support our members and provide a trusted platform for cross-country cooperation. Full implementation by the membership of the Poverty Reduction and Growth Trust (PRGT) financing framework is needed to bolster the Fund’s capacity to support low-income countries in addressing their balance of payments needs.