The International Monetary Fund (IMF) has advised debt-stressed economies to prioritise fiscal discipline and cut spending budgets in order to mitigate the impact of current global economic challenges.

The recommendation forms part of the IMF’s April 2025 Fiscal Monitor Report, which outlines policy options for countries navigating rising debt levels and tightening global financial conditions.

The fund also reiterated that low-income developing countries should remain committed to planned fiscal adjustments, especially in view of persistent financing constraints and heightened debt vulnerabilities.

“For countries facing significant spending pressures and public investment needs, but with some fiscal room, it is prudent to utilise this space within the context of well-defined medium-term fiscal frameworks. For many emerging market and developing economies, rationalising spending and boosting revenues through tax reforms, broadening the tax base, and strengthening revenue administration remain central to ensuring fiscal sustainability,” the Fund noted.

To support long-term fiscal credibility and policy effectiveness, the IMF underscored the importance of anchoring fiscal adjustments within medium-term frameworks, supported by modern public financial management systems.

The fund further expressed that reducing fiscal policy uncertainty would ensure better expenditure efficiency, and foster inclusive growth over the medium to long term.

The call by the IMF comes at a time when countries across the globe, particularly in Sub-Saharan Africa are grappling with limited fiscal buffers, high debt servicing obligations, and growing development financing gaps.

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