The International Monetary Fund is in financial crisis. That will give its critics reason to cheer. But its supporters should cheer as well, for the reason the IMF is facing financial disaster is that its clients are not.
The Fund needs crises, just as doctors need illnesses. But this particular doctor has been too successful. As a result, Fund credit outstanding has fallen to its lowest level in 25 years. The Fund’s income under current policies is expected to fall from $1,125bn this financial year to $757bn three years from now. Its expenses are expected to rise from $955bn to $1,036bn. The looming shortfall is evidently impressive.
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