- 06.10.2025
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Press release. 6 October 2025, Amsterdam. IMF surveillance and policy advice is failing to seriously address the threats of climate change to its macroeconomic stability mandate, reveals a new report from international organisation Recourse, published with Pakistani organisations in the Alliance for Climate Justice and Clean Energy.
The IMF is currently undergoing a review of its Surveillance Policy, which governs how the Fund monitors national financial/economic policy and stability. In its last review in 2021, the Fund agreed to work on ‘macro-critical’ topics like climate, gender and inequality, and launched a Climate Strategy in the same year. The US administration is now putting this review in the spotlight, arguing that climate action is not macro-critical and wanting the Fund to ‘go back to basics’.
This new report assesses how the IMF integrated climate change into its core surveillance activities (country-level economic evaluations known as Article IV consultations) between 2022 and mid-2025. It reveals concerningly slow progress, despite broad coverage of national climate action plans and incipient coverage of climate in econometric models. The IMF continues to advise fiscal consolidation without assessing the impacts of such policies on climate investments, in almost two thirds of the 60 countries assessed. The report flags the risk of the IMF’s climate advice creating a two-track system that boosts wealthy countries but prevents developing countries from pursuing green pathways in the long-term.
Federico Sibaja, IMF Campaign Manager at Recourse, said:
“While the IMF asks countries like Pakistan to increase electricity tariffs to reduce emissions, it encourages countries like Australia to lead green industrial policies with an active role for the state. The Fund is locking in a dual-track approach, further exacerbating the inequalities created by the climate crisis.”
Zain Moulvi, Research Director at Alternative Law Collective, explained:
“Pakistan’s experience shows how the interactions between IMF programmes combined with flawed climate analytics and over-optimistic Debt Sustainability Analysis can turn surveillance into greenwashed austerity. By underestimating disaster risks and climate investment needs, the Fund legitimises regressive levies, subsidy withdrawals, and coal expansion that shrink fiscal space for renewables and resilience.
“Instead of enabling climate action, the combined programmes lock Pakistan into debt-heavy pathways, sidelining just, clean, low-cost alternatives and imposing the steepest costs on vulnerable communities.”
The research shows that the IMF continues to prioritise short-term debt repayment over long-term macroeconomic stability. In at least 7 out of the 60 countries analysed, Article VI reports supported fossil fuel expansion, locking in exposure to stranded assets. Recommendations towards green industrial policy to diversify away from fossil fuels were mostly restricted to advanced economies.
The report provides a set of recommendations for the IMF as it meets in Washington DC for the Annual Meetings (13–17 October) amid mounting pressure from the US to roll back climate work. In the last few months, mentions of ‘climate’ in IMF reports have drastically disappeared, a finding echoed by this analysis. The report recommends: treating climate as a core macrofinancial risk; ensuring rigorous assessments of climate finance needs; and properly assessing the interaction between Fund’s core advice on fiscal, monetary, financial and external policy with climate goals.
“The IMF cannot afford to stop working on climate change, which threatens ecosystems, human systems, and the Fund’s very mandate: macroeconomic stability,” concluded Federico Sibaja.
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The report is published by Recourse, with Alternative Law Collective, Verrha Research, the Climate Action and Energy Access Institute, and the Alliance for Climate Justice and Clean Energy in Pakistan.
Contact: Federico Sibaja, IMF Campaign Manager at Recourse, federico[at]re-course.org, +32491199367 (in Washington DC, 13–17 October)
Cover image: A grey building covered by green vines, in Surabaya, Indonesia. Credit: Aiolhoz / Shutterstock.com.
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