IMF and World Bank Revise Debt Sustainability Framework for Low-Income Countries

The International Monetary Fund (IMF) and World Bank are reforming their debt sustainability framework for low-income countries (LIC-DSF). These reforms, announced in September 2026, introduce a new long-term module to assess how investments, particularly in climate adaptation, impact long-term debt sustainability. This adjustment aims to incorporate the benefits of investing in resilience into financial decisions, balancing upfront costs against future fiscal damage from unmitigated disasters.