IMF pushed bigger austerity cuts, Oxfam says

Oxfam said Thursday that the International Monetary Fund has pushed countries borrowing from it to make larger austerity cuts over the past decade, while the IMF said its programs include protections for vulnerable groups.

The charity said the median annual austerity cuts required by the IMF rose from 0.21 percent of GDP between 2012 and 2017 to 0.85 percent between 2018 and 2025.

Oxfam also said the IMF had weakened protections for social spending in its loan programs. It warned that the cuts undermine spending on public services including health care, education and housing, which it said protect low-income communities.

IMF spokesperson Julie Kozack said Thursday that all IMF programs have “social spending floors” aimed at protecting vulnerable groups. She said the fund is also focused on how countries can raise more domestic revenue or resources to help provide essential public services.

Oxfam said one concern was that the IMF could return to “1980s-style structural adjustment” by demanding large public spending cuts at the start of a program rather than phasing reductions in over several years.

Nabil Abdo, Oxfam's international senior policy adviser, said “frontloading austerity” was harmful. The organisation urged the IMF to ensure its programs do not worsen inequality and called for alternatives to austerity.