- Net operational income is anticipated to remain strong for FY 2023 and to continue the trend in FY 2024, reflecting the high demand for Fund support to the membership.
- The Executive Board agreed to maintain the margin for the rate of charge on IMF lending unchanged at 100 basis points for FY 2024.
Washington, DC:On April 27, 2023, the Executive Board of the International Monetary Fund (IMF) completed its annual review of the Fund's income position for the financial year (FY) ending April 30, 2023.
FY 2023 Income Position
Net operational income, of about SDR 2.0 billion (US$2.7 billion), is anticipated for FY 2023, reflecting mainly the ongoing elevated use of Fund credit. A gain of about SDR 0.3 billion (US$0.5 billion) from the actuarial remeasurement of staff retirement plan assets and liabilities has been estimated for the year.[1]Overall net income is expected to reach SDR 1.8 billion (US$2.4 billion) after subtracting the estimated investment loss in the Endowment Subaccount of SDR 0.2 billion (US$0.3 billion). Net income excluding the impact of IAS 19 gains and losses will increase the Fund's precautionary balances, which are projected to rise to SDR 22.6 billion (US$30.0 billion) at end FY‑ 2023.
The Executive Board also adopted several other decisions that are relevant to the Fund's finances. These included decisions to: (i) reimburse costs to the GRA for the expenses of conducting the business of the SDR Department; (ii) retain in the Investment Account the income (or loss) of the Fixed-Income Subaccount and Endowment Subaccount for FY 2023 ; (iii) place the pension-related remeasurement gain in the special reserve and the remainder of net income equally in the special and general reserves; and (iv) transfer currencies equivalent to the increase in the Fund's reserves from the General Resources Account (GRA) to the Investment Account.
Projections of the Fund's income remain subject to greater than normal uncertainties amid adverse shocks caused by Russia's ongoing war in Ukraine and inflationary pressures. Changes in key assumptions such as the discount rate used to measure the Fund's retirement plan obligations and asset returns can have a large impact on the actual outcome. The FY 2023 annual financial statements will update for the impact of changes in key assumptions made at the time of the April projections.
FY 2024 Income Position and Lending Rate
As noted above, operational income for FY 2024 is expected to remain strong, with projected annual net income of SDR 2.9 billion (US$3.9 billion). However, these projections are subject to a high degree of uncertainty related to the scale of new lending associated with macroeconomic developments and the varying paths to recovery; as well as the timing and amounts of disbursements under approved arrangements. Uncertainties from a more shock-prone environment, high inflation, and ongoing geopolitical tensions are expected to impact the performance of the Fund's investment and retirement plan asset portfolios. Positive projected net income should allow the Fund to continue to accumulate precautionary balances.
The IMF's basic lending rate for member countries' use of IMF credit is the SDR interest rate plus a fixed margin. In April 2022, the Executive Board set the margin for this rate of charge at 100 basis points for financial years FY 2023 and FY 2024. In the context of this year's comprehensive review of the Fund's income position at the midpoint of this two-year period, the Executive Board concluded that the margin should remain unchanged.
