Determinants of Pre-Pandemic Demand for the IMF’s Concessional Financing

Huy Nguyen and Randa Sab

No 2021/015, IMF Working Papers from International Monetary Fund

Abstract: This study focuses on identifying the main factors that influenced country-specific and aggregate demand for IMF concessional financing between 1986 and 2018 and makes within-period and out-of-period forecasts. We find that the external debt level, inflation, and real effective exchange rate are the main economic variables influencing concessional borrowing for most eligible countries. Finally, our approach is able to provide quite accurate country-level and aggregate forecasts for historical financing events prior to the COVID-19 pandemic.

Keywords: Concessional financing; dynamic factor model; probit regression.; WP; financing arrangement; IMF staff calculation; IMF financing event; factor estimation step (search for similar items in EconPapers)
Pages: 29
Date: 2021-01-29
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