World Bank and IMF approve reforms to low-income country debt framework

  • World Bank and IMF executive boards approved reforms to their joint low-income debt framework.
  • The revised framework is expected to become operational in the second half of 2027.
  • The July review found the framework identified debt-distress episodes in advance.

The World Bank and International Monetary Fund have approved reforms to their joint debt sustainability framework for low-income countries, responding to rising debt levels, greater commercial borrowing and reduced official development assistance. The first review since 2017 calls for stronger domestic-debt analysis, broader consideration of long-term challenges including climate change, refined measures of debt-carrying capacity, and improved forecasting stress tests and data transparency. The revised framework is expected to become operational in the second half of 2027.

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