The International Monetary Fund released a departmental paper on “Macroeconomic Challenges of Fragility and Policies for Stability and Growth”, synthesising macroeconomic challenges and policy approaches for economies facing fragility and conflict. Drawing on the implementation of the IMF’s 2022 Fragile and Conflict-Affected States Strategy, it concludes that fragility is associated with slower long-term growth and greater exposure to shocks, and argues that strengthening core government functions is central to improving macroeconomic performance. The paper notes that in 2025 fragile and conflict-affected states comprised 38 economies home to 1 billion people, and that recent shocks have intensified fragility-related pressures even in more stable economies. It links weaker outcomes to impaired government functions such as weak public service provision, low tax revenues and underdeveloped financial sectors, and finds external shocks including terms-of-trade changes have stronger and longer-lasting effects, especially where institutional fragility is compounded by conflict or structural characteristics such as fuel export dependence or small country size. International financial institutions are positioned to support mitigation and recovery through tailored policy advice, capacity development, financing, and strengthened partnerships with humanitarian, development and peace organisations.
International Monetary Fund 2026-02-18
International Monetary Fund publishes paper linking fragility to weaker growth and calling for stronger core government functions
The International Monetary Fund released a paper on macroeconomic challenges and policy approaches for fragile and conflict-affected economies, highlighting slower growth and increased shock exposure due to impaired government functions. It emphasizes strengthening core government functions to improve macroeconomic performance and suggests international financial institutions support through tailored advice, capacity development, and partnerships.