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Macroeconomic Developments and Prospects in Low-Income Countries
The paper also emphasizes that stronger macro-fiscal management and fiscal institutions can help attract more and higher-quality foreign direct investment by reducing policy uncertainty and improving investors’ risk-adjusted returns. By contrast, fiscal incentives should be used selectively and only where fiscal discipline and institutional capacity are already strong. International support, including concessional financing, capacity development, and IMF engagement, will remain critical, with scarce concessional resources best prioritized toward the poorest and fragile LICs.
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