Implicit Transfers in IMF Lending, 1973-2003

42 Pages Posted: 10 Jan 2006

See all articles by Jeromin Zettelmeyer

Jeromin Zettelmeyer

Peter G. Peterson Institute for International Economics; CEPR

Priyadarshani Joshi

Princeton University

Date Written: January 2005


We compute realized transfers implicit in IMF lending from 1973-2003, based on 2003 IMF repayment projections and promised debt relief. IMF lending rates to high- and middle-income countries fell short of industrial country borrowing rates by 30-150 basis points over the period as a whole, but exhibited a small premium after 1987. The subsidy received by low-income and HIPC countries was much higher (400-600 basis points, respectively). In 2002 NPV terms, cumulative transfers were 12-15 percent of 2002 GDP for the HIPCs, 2-3 percent for low income countries, and less than ¾ percent for the emerging market countries.

Keywords: International Monetary Fund, subsidy, moral hazard, HIPC initiative

JEL Classification: F33, F34

Suggested Citation

Zettelmeyer, Jeromin and Joshi, Priyadarshani, Implicit Transfers in IMF Lending, 1973-2003 (January 2005). IMF Working Paper No. 05/8. Available at SSRN:

Jeromin Zettelmeyer (Contact Author)

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

CEPR ( email )

United Kingdom

Priyadarshani Joshi

Princeton University ( email )

22 Chambers Street
Princeton, NJ 08544-0708
United States

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