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The Macro-Fiscal Impacts of Post-Disaster IMF Financing: Evidence from a Synthetic Control Approach

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  • Pedro Juarros
  • Junko Mochizuki

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.

Suggested Citation

  • Pedro Juarros & Junko Mochizuki, 2026. "The Macro-Fiscal Impacts of Post-Disaster IMF Financing: Evidence from a Synthetic Control Approach," IMF Working Papers 2026/091, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2026/091
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