The International Monetary Fund’s (IMF) executive board has approved the lender’s administrative and capital budgets for the financial year (FY) 2022, beginning May 1, 2021.
The approved net administrative budget for the latest financial year has been set at $1.21 billion, while the capital budget for the year will be $79 million, according to a statement by the IMF.
The FY 2022 budget is set in the context of a global economic outlook that is marked by high uncertainty and the likelihood of uneven recovery, with many countries facing an unsettling crisis. The budget provides for continued fund support for its membership to navigate a safe exit from the crisis.
The pandemic and the lockdown measures have tipped the world economy into its worst recession since the 1930s. Its impact on the world’s poor has been especially harsh and may have pushed about 100 million people into extreme poverty in 2020 alone, according to the UN.
The IMF also said many countries may not return to the pre-COVID path of economic activity for several years, and those without the means to mitigate the impact of the crisis will be the hardest hit.
“With the pandemic still present in most countries and mutations of the virus emerging, uncertainty remains exceptionally high. Faced with a likely uneven recovery, the IMF will continue to focus on supporting members’ efforts to confront the impact of the COVID-19 crisis,” the Fund said.
The capital budget provides financing for building facilities and information technology capital projects including modernizing digital platforms and tools, according to IMF.
“Financial support is expected to rise and programs to become more complicated, as many emergency financing operations are followed by upper credit tranche (UCT) conditionality programs, in many cases characterized by complex debt issues,” IMF stated.
As of early March, 12 UCT arrangements have been approved in the year. Going forward, another 38 members have expressed interest in new UCT programs.
The executive board of the IMF also indicated budgets for 2023 and 2024. The administrative budget for the financial year 2023 is expected to be $1.24 billion and for 2024 it will be $1.26 billion. The capital budgets for 2023 and 2024 will be $92.4 million and $87.9 million respectively, the IMF said.