IMF Executive Board Concludes 2025 Article IV Consultation and Completes Second Review Under the Extended Credit Facility with LiberiaHTML File

October 1, 2025

• The IMF Executive Board concluded the 2025 Article IV Consultation and completed the second review under the Extended Credit Facility (ECF) Arrangement with Liberia, providing immediate access to SDR 19.3 million (about US$ 26.5 million).
• Growth is projected at 4.6 percent in 2025 and 5.4 percent in 2026. Medium-term prospects remain favorable with GDP growth expected to stabilize at 5.5 percent, assuming full and timely implementation of the ECF-supported reform program.
• Preserving fiscal consolidation, enhancing financial stability, and addressing key structural weaknesses-particularly limited competitiveness and widespread corruption-remain key challenges.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation and the second review of the 40-month Extended Credit Facility (ECF) arrangement for Liberia. The Board's decision allows for an immediate disbursement of SDR 19.3 million (about US$ 26.5 million), bringing total disbursements under the arrangement to SDR 57.9 million (about US$ 79.4 million). The authorities need more time to consider the publication of the Staff Report prepared for this consultation.[1]

Liberia's ECF arrangement-SDR 155 million (60 percent of quota)-was approved by the IMF Executive Board on September 25, 2024, to support the country's effort to restore macroeconomic stability, reduce debt vulnerabilities, preserve financial stability, and strengthen governance.

Program performance has remained broadly satisfactory: five out of six performance criteria were met, with one missed. The Executive Board approved a waiver of nonobservance of the continuous performance criterion on the non-accumulation of new external arrears, based on credible corrective actions taken by the authorities.

Following a strong post-pandemic recovery, economic activity moderated somewhat in 2024. Growth is projected to reach 4.6 percent in 2025 and accelerate to 5.4 percent in 2026, supported by an expansion of mining activities-particularly gold and iron ore-as well as a recovery of agriculture production. Political stability has provided a supported backdrop for the ambitious new medium-term development strategy, the ARREST Agenda for Inclusive Development (AAID).

Following the Executive Board discussion, Mr. Bo Li, Acting Chair and Deputy Managing Director, made the following statement:

"The authorities have made notable progress in implementing sound macroeconomic policies and key structural reforms in the first year of their Fund-supported program. Measures to reduce the large fiscal deficit, mitigate debt vulnerabilities, and strengthen foreign exchange reserves have yielded encouraging results. Swift policy responses to the sudden termination of large grant support-through rationalizing low-priority spending and mobilizing additional domestic revenues- have also safeguarded critical social programs previously financed by USAID.

"Building on this strong start, more ambitious domestic revenue mobilization will be essential to create fiscal space for priority development spending. A comprehensive reform agenda is planned for the coming years, including the transition from the general sales tax to a higher-rate VAT, income tax reforms, and the rationalization of tax exemptions. Continued spending discipline, together with improvements in the composition and quality of public expenditures, will also be crucial.

"The Central Bank of Liberia's efforts to address weaknesses in three banks and safeguard the banking sector stability are welcome. Steadfast implementation of a stronger regulatory framework will be key, while completing bank restructuring and reducing high non-performing loans will further strengthen stability and support credit intermediation for private-sector-led growth.

"Recent measures to strengthen the regulatory framework of the Liberia Anti-Corruption Commission will enhance transparency, including through the publication of public officials' asset declarations. The governance diagnostic study will provide a solid foundation for effective governance reforms across sectors, which will be instrumental in attracting foreign investments and supporting higher, more inclusive growth."

Executive Board Assessment^[2]

Executive Directors agreed with the thrust of the staff appraisal. They commended the authorities for their efforts to preserve macroeconomic stability and welcomed the broadly satisfactory performance under the ECF arrangement. Despite improvements in the outlook, risks remain tilted to the downside, including from the ongoing decline in external assistance and global economic uncertainty. Against this background, Directors emphasized the importance of sustained reform efforts to preserve fiscal discipline, enhance financial stability, strengthen public governance, and support private-sector development to raise living standards and reduce poverty.

Directors commended the authorities for maintaining a prudent fiscal stance, particularly in light of reduced foreign aid. They were encouraged by the forward-looking fiscal strategy aimed at further increasing tax revenues to meet social and development needs, rebuilding fiscal space, and mitigating debt vulnerabilities. Directors also stressed the importance of ongoing fiscal reforms, notably through improving the quality of public spending and strengthening public financial and investment management. They underlined the importance of mobilizing revenues and catalyzing donor support-especially through grants and concessional financing-to address the large infrastructure gap while safeguarding debt sustainability. More generally, Directors urged the need to maintain a robust debt management policy to prevent the accumulation of new external arrears.

Directors supported the authorities' data-driven monetary policy to safeguard price stability. They encouraged continued efforts to promote de-dollarization, enhance monetary transmission, and strengthen reserves. Directors agreed that while the financial sector remains broadly stable, legacy risks remain. They welcomed the initial policy measures taken to address key weaknesses in several banks and emphasized the importance of steadfast and timely implementation of their restructuring plans. Bolstering the banking sector's supervisory and regulatory toolkit and addressing the high level of non-performing loans will play a key role in preserving financial stability.

To unlock growth potential and enhance climate resilience, Directors encouraged steadfast implementation of structural reforms. They called for intensified efforts to combat corruption by strengthening Liberia's overall governance framework and ensuring institutional integrity. Directors also highlighted the importance of strengthening the AML/CFT framework and the crucial role of the governance diagnostic study in providing a strong foundation for implementing critical policy reforms. To enhance policymaking, measures to improve the quality and availability of statistics were also encouraged.

It is expected that the next Article IV consultation with Liberia will be held in accordance with the Executive Board's decision on consultation cycles for members with Fund arrangements.

[1] Under the IMF's Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The authorities have requested additional time to decide on the publication of the staff report. A final decision is expected not later than 28 days from the Board consideration date.

[2] At the conclusion of the discussion, the Managing Director, as Chair of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.