It would also allow users to adjust the long-term GDP growth path – thereby in principle providing space to incorporate the results of the positive growth impact of any anti-inequality spending. The IMF’s own work(IMF 2017) has shown the very substantial impact reducing inequality could have on accelerating growth by up to 5 per cent a year in the countries with highest inequality: it would accelerate per capita real GDP growth by between 0.15 per cent and 0.4 per cent(the highest numbers applying to the most unequal countries) for every percentage point by which the Gini coefficient is reduced. Therefore, it will be vital that this accelerated growth rate be included in the module, to provide a realistic assessment of the positive as well as negative impact of anti-inequality spending on debt sustainability. As mentioned in Section 2, there exist clear costings methodologies for each sector, most of which(for education, health, electricity, water and sanitation, and rural roads) have been agreed by the IMF and applied across eight countries. These reflect the“currently best estimates”(to use the phrase applied in the SRDSF climate module) by the IMF for individual country costs for spending on these sectors which will be sufficient to reach the SDGs for different regions or types of countries. It would also be highly desirable to add in costs for social protection, given that widely accepted methodologies exist, courtesy of the International Labour Organization(ILO)(ILO 2024), and taking into account the crucial role social protection played in protecting overall progress on all SDGs during the COVID-19 pandemic. To facilitate the task of integrating anti-inequality spending into the DSF, the module could again be“pre-populated” with estimates of total likely spending as a proportion of GDP for different country income level groups, making it easy to use while giving the user plenty of flexibility to change the default assumptions. Several experts interviewed for this paper have suggested that, given the close links between the climate and inequality crises, and the need to tackle both urgently in virtually all countries, all countries borrowing PRGF or RSF should be analysed using both the climate and inequality modules. However, if this is initially too ambitious, it would be relatively easy to define which countries should be analysed using the module: • For countries which request financing from the Poverty Reduction and Growth Facility(PRGF) of the IMF, the first submodule would have to be analysed. • Use of one or both of the submodules would also be compulsory in predefined groups of countries in which the fiscal costs and risks of reducing inequality are expected to be significant. ⁻ The first submodule could be compulsory in, for example, the top 25 per cent of countries with the highest inequality levels, as measured by their Gini coefficients after current tax and transfer measures. A simple threshold for such an analysis could be set at a Gini of 0.4, which would cover around 57 countries, and would match the levels considered to be“high inequality” by the UN and the World Bank. 14 More complex methods of setting such a threshold, using other inequality and poverty indicators, could also be devised. ⁻ The submodule could also be used in all countries which have less high inequality(for example a Gini of between 0.35 and 0.4) but where the country’s government has set itself a clear goal to reduce inequality and growing inequality has been identified as a problem by the World Bank and/or IMF(this would cover countries such as Ethiopia, Kenya, Mongolia, Senegal, Sierra Leone and Viet Nam). ⁻ The second submodule could be used in countries where the country’s government has set itself a clear goal to reduce inequality, and where data on costs of spending on the broader sectors are available(which from DFI’s experience are generally OECD Member countries and some middle-income countries in Asia and Latin America). 14 For the definition of these levels and the countries which would be covered by them, see Martin and Kripke 2023, used as a submission into the review of the UN progress on SDG10. These are also the levels which were suggested as representing“high inequality” which could be judged as“macro-critical” by Fund staff interviewed as part of the process of compiling the paper. Series: Debt Sustainability Assessments& Their Role in the International Financial Architecture 11