WNAM REPORT: The International Monetary Fund (IMF) executive board completed its annual review of the Fund’s income position for the fiscal year (FY) ending April 30, 2024, and approved the medium-term budget for FY 2025–FY 2027, reports a correspondent.
The IMF reported strong operational income for FY 2024, with net operational income of approximately Special Drawing Rights (SDR) 2.5 billion (US$3.3 billion), largely due to the sustained high demand for IMF credit.
An actuarial remeasurement of staff retirement plan assets also resulted in a gain of SDR 1.3 billion (US$1.8 billion). Overall, the IMF’s net income is projected to reach SDR 4.4 billion (US$6.0 billion) for the year, helping boost its precautionary balances to SDR 25.1 billion (US$33.4 billion) by the end of FY 2024, meeting the Fund’s medium-term target.
The fund expects continued strong operational income for FY 2025 and FY 2026, with projected net income of SDR 2.9 billion (US$3.9 billion) and SDR 2.8 billion (US$3.8 billion) respectively. However, uncertainties like financial market volatility, geopolitical tensions, and inflationary pressures could impact these projections, particularly the performance of the Fund’s investments and retirement assets. The ongoing review of surcharge policies and lending rate margins may also influence future income.
The IMF’s lending rate consists of the SDR interest rate plus a margin. The executive board decided to maintain the margin for the rate of charge at 100 basis points until the completion of the surcharge policy review, or until the end of FY 2025 at the latest. This decision ensures stability for member countries using IMF credit while allowing for a thorough review of the policies that impact the cost of borrowing.
The medium-term budget for FY 2025–FY 2027 was also approved by the IMF’s executive board. Despite the global economy showing resilience to recent shocks, the board acknowledged that the overall outlook remains complex, with slow and uneven growth, rising fragmentation and high interest rates persisting even as inflationary pressures ease.
