|AUTHOR||Hugh Bredenkamp, Sanjeev Gupta, Jonathan Ostry, and Christopher Towe (Eds)|
|ORGANIZATION||International Monetary Fund|
|TOPIC||Economic crisis and recovery|
The global financial crisis is expected to have a major impact on low-income countries (LICs), especially in sub-Saharan Africa—and urgent action is required by LIC policymakers and the international community. The crisis is projected to increase the financing needs of LICs by at least US$25 billion in 2009, and much larger needs are possible. Twenty-six LICs appear particularly vulnerable to the unfolding crisis. Additional external assistance and foreign financing will be essential to mitigate the impact of the crisis on LICs. The Fund is deploying its own financing facilities for LICs, while making efforts to sustain and catalyze additional assistance from other institutions and donors. Fund financing to LICs has already increased significantly; new financing arrangements jumped from 5 in 2007 to 23 in 2008, representing an increase in total (GRA and PRGF/ESF) disbursements from US$0.6 billion to US$5.4 billion. The Fund has also launched a broad examination of its LIC facilities and financing framework to ensure its financial assistance meets the diverse needs of its lowincome members.