IMF Calls for Fewer but Deeper Reforms to Address a More Vulnerable Global Economy

The International Monetary Fund supported recommendations for more targeted loan programs, with early fiscal adjustments, sequenced structural reforms, and increased social protection. The proposal comes as developing countries face rising debt, high financial costs, and renewed criticism regarding the impact of austerity.

• The IMF recommends implementing fewer reforms, but with greater depth and better adaptation to each country.
• The organization calls for a combination of fiscal consolidation, revenue growth, social spending, and more realistic risk assessments.
• Civil organizations and former officials question whether the new framework will truly change the application of loan conditions.

🌍 IMF calls for fewer but deeper reforms
Proposes early fiscal adjustments, sequenced reforms, and social protection.
Calls for adapting each program and better assessing risks.
Civil organizations question austerity and compliance with conditions. pic.twitter.com/9HFJXTfVKA
--- Diario฿itcoin (@DiarioBitcoin) September 24, 2026

A Review in an Unstable World

The International Monetary Fund supported recommendations to adjust the design and implementation of its loan programs, aiming to respond to a global economy more exposed to shocks. The review recommends focusing on a smaller number of reforms but executing them with greater depth and a more precise adaptation to the conditions of each country. The proposal seeks to improve the outcomes of the programs without lowering the standards that the organization applies when granting financing.

Rishi Goyal, deputy director of the IMF's strategy, policy, and review department, described the overall framework as appropriate, although he acknowledged that the international and political context is changing. According to the official, the social tensions faced by several members require designing reforms better suited to their circumstances, rather than applying broad packages with unrealistic conditions. His conclusion was that the organization should aim for fewer but deeper reforms.

The review evaluated the programs supported by the IMF between January 2018 and December 2024, a period marked by several episodes of international disruption. During those seven years, the trade war between the United States and China occurred during Donald Trump's first term, the COVID pandemic, and Russia's large-scale invasion of Ukraine. The organization stated that it responded quickly and flexibly to those crises, although it admitted that not all countries regained stability in the medium term.

Reuters reported that the IMF board endorsed the recommendations after reviewing the performance of the programs and their conditions. The analysis coincides with recent changes in the joint framework of the IMF and the World Bank for the debt of low-income countries, as well as a review of the process used to assess national economies. Together, these initiatives aim to update tools that were designed for a less volatile international environment.

Fiscal Adjustments with Limits and Social Protection

One of the central conclusions is that fiscal adjustments should begin earlier and be sustained for longer when circumstances allow. The IMF noted that programs with this type of trajectory tend to have higher chances of success, but clarified that anticipation cannot become a demand disconnected from the political and economic capacity of each country. The institution also called for accompanying budget cuts with realistic measures to boost growth.

The organization insisted that fiscal consolidation should not displace the necessary social spending to protect the most vulnerable people. This precision becomes important in countries facing simultaneously growing public debt, higher borrowing costs, and significant reductions in official development assistance. For these governments, adjusting public accounts while preserving essential services can become a difficult tension to resolve.

The recommendations also call for a more balanced distribution between increasing revenues and reducing expenditures. The IMF requested that its programs incorporate better risk assessment and greater realism regarding the financing available for projects, two elements that can determine whether a reform is feasible or remains limited to a formal commitment. The declared intention is that fiscal targets do not depend on overly optimistic assumptions.

The debate, however, is not limited to the technical language of the review. Civil society groups warned that the new approach could leave developing countries exposed to more severe austerity measures, precisely when their public finances are under pressure and external shocks are occurring more frequently. The discussion faces two priorities: preserving debt sustainability and preventing the cost of adjustment from falling on health, education, and other public goods.

New Tools for Reforms

Goyal explained that the IMF is introducing a medium-term structural reform tool to identify the key transformations of each program. The tool should order these measures in a sequence and adapt them to the country's implementation capacity, with the expectation that the borrowed resources will produce better results. The official described the goal as obtaining more value for the money committed to the programs.

The institution also plans to strengthen the capacity of its teams and staff to correct the course when new shocks arise. This mechanism could allow changes during the execution of a program, rather than waiting for a subsequent review to acknowledge that the original assumptions are no longer valid. Flexibility, however, will have to coexist with sufficient controls to prevent conditions from losing effectiveness.

Critics argue that the problem has not always been the absence of rules, but the irregular application of existing ones. Eric LeCompte, executive director of Jubilee USA Network, stated that some countries, including Egypt, Pakistan, and Argentina, have moved from one loan program to another, while previous financial policies failed to prevent the return of crises. In his view, debt reviews and reports on compliance with conditions have not been sufficient to keep countries out of trouble.

LeCompte also noted that IMF programs may have protected financial stability in certain cases but harmed public goods in others. His criticism points to cuts that precisely reduce the resources available for the poorest people, a consequence that the new emphasis on social spending seeks to limit. The challenge for the organization will be to demonstrate that this protection is part of the core decisions and not just safeguards added at the end of the process.

The Question of Compliance

Martin Muehleisen, former head of strategy at the IMF, raised a different objection: whether the institution has insisted enough that countries meet the conditions of their programs. Although he clarified that he had not reviewed the document, he asked whether the organization has withheld disbursements when commitments are not met. This question pertains to the real power of conditionality, because a program may include demanding reforms yet still lose strength if the consequences for non-compliance are uncertain.

The former official argued that the IMF must identify what materially failed in previous programs and what will concretely change with the new framework. From this perspective, it is not enough to update the language of recommendations if the incentives, evaluations, and decisions regarding disbursements remain the same. The review will need to translate into visible procedures to convince governments, creditors, and civil organizations.

The institution claims that its performance during recent crises demonstrated a rapid and flexible response capacity, and that several countries managed to restore stability with its support. However, the evaluation itself acknowledges that the return to medium-term stability was uneven, a sign that emergency responses do not always lead to lasting solutions. This difference will be especially relevant for economies that continue to be exposed to wars, trade tensions, pandemics, or other systemic shocks.

The final outcome will depend on how the IMF combines fiscal discipline, growth, social protection, and financial realism in each program. If reforms are reduced in number without improving compliance, countries could face the same debt cycles that prompted criticism; if they become deeper without sufficient protection, the social cost could increase. The review opens an opportunity to correct both risks, but its credibility will be measured in execution and not just in design.

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