Revisiting the Debt Sustainability Framework for Low-Income Countries PDF Download

Author: International Monetary Fund
Publisher: INTERNATIONAL MONETARY FUND
ISBN: 9781498341028
Category : Business & Economics
Languages : en
Pages : 70

View

Book Description
Introduced in 2005, the joint IMF-World Bank Debt Sustainability Framework (DSF) is a standardized framework for conducting public and external debt sustainability analysis (DSA) in low-income countries (LICs). It aims to help guide the borrowing decisions of LICs, provide guidance for creditors‘ lending and grant allocation decisions, and improve World Bank and IMF assessments and policy advice. The framework was previously reviewed in 2006 and 2009. This paper provides a comprehensive review of the framework to assess whether it remains adequate in light of changing circumstances in LICs. It reviews the DSF‘s performance to date, presents the results of recent analytical work by IMF and World Banks staffs, and discusses a number of areas in which the framework could be improved.

Author: International Monetary Fund. Strategy, Policy, & Review Department
Publisher: International Monetary Fund
ISBN: 1498346359
Category : Business & Economics
Languages : en
Pages : 111

View

Book Description
The Debt Sustainability Framework for Low-income Countries (LIC DSF) has been the cornerstone of assessments of risks to debt sustainability in LICs. The framework classifies countries based on their assessed debt-carrying capacity, estimates threshold levels for selected debt burden indicators, evaluates baseline projections and stress test scenarios relative to these thresholds, and then combines indicative rules and staff judgment to assign risk ratings of external debt distress. The framework has demonstrated its operational value since the last review was conducted in 2012, but there are areas where new features can be introduced to enhance its performance in assessing risks. Against the backdrop of the evolving nature of risks facing LICs, both staff analysis and stakeholder feedback suggest gaps in the framework to be addressed. Complexity and lack of transparency have also been highlighted as causes for concern. This paper proposes a set of reforms to enhance the value of the LIC DSF for all users. In developing these reforms, staff has been guided by two over-arching principles: a) the core architecture of the DSF—model-based results complemented by judgment—remains appropriate; and b) reforms should ensure that the DSF maintains an appropriate balance by providing countries with early warnings of potential debt distress without unnecessarily constraining their borrowing for development.

Author: Yasemin Bal Gunduz
Publisher: International Monetary Fund
ISBN: 1475599773
Category : Business & Economics
Languages : en
Pages : 47

View

Book Description
This paper estimates the determinants of external debt distress in low-income countries (LICs), disentangling the roles of institutions, shocks, and policies. The most prominent factors in raising the risk of debt distress are the weak protection of private property rights, adverse shocks to real non-oil commodity prices, and a high debt burden. Results also suggest that weak economic institutions tend to raise the probability of debt distress through persistently weak economic policies and high vulnerability to external shocks. The model enables a more granular analysis of debt sustainability in LICs and has a higher predictive power compared to the earlier scant literature.

Author: Mr.Benedicte Baduel
Publisher: International Monetary Fund
ISBN: 1475505159
Category : Business & Economics
Languages : en
Pages : 56

View

Book Description
The Debt Sustainability Analysis (DSA) for low-income countries (LICs) is a standardized analytical tool to monitor debt sustainability. This paper uses DSAs from three periods around the time of the global economic crisis to analyze the projected trajectories of debt ratios for a sample of LICs. The aggregate data suggest that LIC vulnerabilities improved on the whole during the period prior to the crisis, and that the crisis had a strong short-run impact on key ratios of debt (debt-to-GDP, -exports, and -fiscal revenues) and debt service (debt service-to-exports, and -revenues). Although projected debt burdens increased following the crisis, debt indicators tend to return to their pre-crisis levels over the projection horizon. This may reflect a strong and durable policy response by LICs towards the crisis, or also reflect specific assumptions on the long-run growth dividends of public external debt.

Author: International Monetary Fund. Strategy, Policy, & Review Department
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 191

View

Book Description
This Handbook provides guidance to staff on the IMF’s concessional financial facilities and non-financial instruments for low-income countries (LICs), defined here as all countries eligible to obtain concessional financing from the Fund. It updates the previous version of the Handbook that was published in December 2017 (IMF, 2017e) by incorporating modifications resulting from the 2018–19 Review of Facilities for Low-Income Countries and Review of the Financing of the Fund’s Concessional Assistance and Debt Relief to Low-Income Member Countries (IMF, 2019a, b), approved by the Board in May 2019; the reforms introduced in 2021 on the basis of the Board paper Fund Concessional Financial Support for Low-Income Countries—Responding to the Pandemic (IMF, 2021a), approved in July 2021; and a number of other recent Board papers. Designed as a comprehensive reference tool for program work on LICs, the Handbook also refers, in summary form, to a range of relevant policies that apply more generally to IMF members. As with all guidance notes, the relevant IMF Executive Board decisions including the terms of the various LIC Trust Instruments that have been adopted by the Board, remain the primary legal authority on the matters covered in the Handbook.

Author: International Monetary Fund. Legal Dept.
Publisher: International Monetary Fund
ISBN: 1513515217
Category : Business & Economics
Languages : en
Pages : 854

View

Book Description
This volume is the Fortieth Issue of Selected Decisions and Selected Documents of the IMF. It includes decisions, interpretations, and resolutions of the Executive Board and the Board of Governors of the IMF, as well as selected documents, to which frequent reference is made in the current activities of the IMF. In addition, it includes certain documents relating to the IMF, the United Nations, and other international organizations. As with other recent issues, the number of decisions in force continues to increase, with the decision format tending to be longer given the use of summings up in lieu of formal decisions. Accordingly, it has become necessary to delete certain decisions that were included in earlier issues, that is, those that only completed or called for reviews of decisions, those that lapsed, and those that were superseded by more recent decisions. Wherever reference is made in these decisions and documents to a provision of the IMF’s Articles of Agreement or Rules and Regulations that has subsequently been renumbered by, or because of, the Second Amendment of the Fund’s Articles of Agreement (effective April 1, 1978), the corresponding provision currently in effect is cited in a footnote.

Author: International Monetary Fund. Legal Dept.
Publisher: International Monetary Fund
ISBN: 1589068556
Category : Business & Economics
Languages : en
Pages : 962

View

Book Description
This volume documents decisions, interpretations, and resolutions of the Executive Board and Board of Governors of the International Monetary Fund, as well as documents relating to the United Nations and other international organizations.

Author: International Monetary Fund. Legal Dept.
Publisher: International Monetary Fund
ISBN: 1475548656
Category : Business & Economics
Languages : en
Pages : 1088

View

Book Description
The Thirty-Seventh Issue of Selected Decisions and Selected Documents of the International Monetary Fund includes decisions, interpretations, and resolutions of the Executive Board and the Board of Governors of the International Monetary Fund, as well as selected documents to which frequent reference is made in the current activities of the Fund. In addition, it includes documents relating to the IMF, the United Nations, and other international organizations.

Author: International Monetary Fund. African Dept.
Publisher: International Monetary Fund
ISBN: 1498315682
Category : Business & Economics
Languages : en
Pages : 68

View

Book Description
Regional growth weakened in 2013 due to a fall in oil production in most countries. GDP growth is expected to pick-up in 2014 due to the recovery of oil production and the continuation of the implementation of public investment plans in most of CEMAC countries. Despite large spending of oil wealth during the last years, poverty, income inequality and unemployment remain high. The business climate is one of the most challenging in Africa. The region’s most pressing challenge is to implement structural reforms to promote sustainable and inclusive growth while adopting macro policies to preserve financial stability, ensure an efficient use of oil revenues and increase resilience to shocks.

Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1498344046
Category : Business & Economics
Languages : en
Pages : 60

View

Book Description
This is the first joint IMF/World Bank report on public debt vulnerabilities in low income countries (LICs). It examines debt-related developments and their underlying causes since the onset of the global financial crisis. The findings will inform the upcoming review of the IMF/WB debt sustainability framework for LICs. Over this period, improved macroeconomic performance in LICs, combined with HIPC/MDRI debt relief and high demand for commodities, contributed to improved LIC creditworthiness. At the same time, new borrowing opportunities emerged as a result of the accommodative liquidity conditions in international capital markets, the deepening of domestic financial markets for some LICs, and the growing lending activities of non-Paris Club countries. These new financing possibilities helped mitigate the decline in Paris Club lending to LICs and have been associated with a shift toward greater reliance on non-concessional credit. The changing financing landscape has been most significant for frontier LICs.