Estimating the Budgetary Cost of U.S. Commitments to the International Monetary Fund: Working Paper 2026-02

By Michael Falkenheim and Youstiena Shafeek.

Using a fair-value approach, the Congressional Budget Office estimates the cost of increasing the United States' financial commitment to the International Monetary Fund (IMF). Although countries default much less often on the IMF than on other lenders, the fund still carries credit risk. By design, the IMF lends to countries experiencing significant macroeconomic challenges. Private markets often avoid those borrowers. Even when borrowing countries eventually repay loans that fall into arrears, the IMF still experiences a financial burden. The fund passes some costs of such defaults to members through a "burden sharing" mechanism that reduces the income that the United States and other creditors receive on their contributions. In addition, the United States has historically offered further support to help countries resolve their overdue IMF debts. CBO estimates the U.S. cost under current law by incorporating average default costs and market risk—which differs from the Office of Management and Budget's assumption of negligible risk. For the U.S. contribution's permanent component, the net present value cost is the discounted total of those annual costs in perpetuity. Results suggest that the fair-value cost for the United States is about 1.36 percent of its commitment to the IMF. That finding represents a one-time expense to cover the cost of the commitment in perpetuity. Sensitivity analyses show that factors such as borrowers' income levels and the choice of discount rate affect the estimates. The IMF's preferred creditor status, which effectively brings about a three- to four-notch credit rating uplift, helps keep overall risk relatively low.