The IMF and the road to a green and inclusive recovery after Covid-19

Since the onset of the Covid-19 pandemic, the International Monetary Fund (IMF) has reasserted its role as the world’s leading financial firefighter. It scaled up financial support to countries in need, developed new lending instruments and secured an increase in the SDR allocation, thereby boosting global liquidity. While achieving these landmarks, the organization also became a strong public advocate of a just recovery, promoting policies that would prevent inequalities around the world from widening. At the same time, the IMF positioned itself at the forefront of policy debates on climate change. The organization has identified mitigating and adapting to climate change as critical to macroeconomic stability. To this end, it recently began rolling out policy measures to underpin country efforts at a green transition, ranging from expanding climate-sensitive economic analysis toolkits, developing relevant technical assistance programs, and—eventually—launching lending facilities to underpin sustainable development policies. This report examines the scope for IMF involvement in Green, Resilient and Inclusive Development (GRID) objectives, building on how these objectives have been operationalized by the World Bank.