World Bank Budget Increases by 6% in Real Terms in FY25 For More Country Engagement and Supervision Support

BY BILL KATZENSTEIN

September 27, 2024

The World Bank (IBRD/IDA) administrative budget was approved at $3,498 million for FY25, a sizable rise from the $3,170 million authorization for FY24. Of the increase of $328 million, $190 million (the 6% ‘real’ increase) is to fund operational priorities, and $138 million is to cover the impact of inflation on Bank expenses overall.

The $190 million increase earmarked for strengthening operations is to be supplemented by redeploying base budget of $144 million through a five-percent productivity improvement program. As further elaborated in the FY25 Budget document, the total additional budget of $334 million planned for operational priorities is to provide for:

  • Closer supervision of high-risk projects, and to cover an increase in total projects under supervision (e.g., increased from 1,570 in FY19 to an estimated 1,950 in FY24.)
  • Bolstering management of complex operations in areas affected by fragility, conflict and violence; and for operations in Small States that require higher levels of support.
  • Resources for additional country policy work and an expanded fiduciary and safeguards framework under IDA 20.
  • Increasing the speed of project implementation
  • Introduction of a Crises Preparedness and Response Toolkit
  • Other priorities, including an improved World Bank Group Scorecard, knowledge and partnerships, establishing a new Digital Vice-Presidency, and improving compensation in country offices.

The Long View

Notwithstanding the large FY25 budget increase, the World Bank has exercised moderation in budgeting during the past two decades. Administrative expenses authorized for FY25, net of reimbursements, are at about the same level as twenty years ago in constant dollars (i.e., adjusted for the impacts of inflation) while IBRD/IDA lending reached new highs over the past four years.

The following graphs (click to expand) illustrate the growth in World Bank administrative expenses and operations since the founding of the institution.

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