Public Information Notice: IMF Discusses Applications of and Methodological Refinements to Assessments of Sustainability, September 5, 2003

Press Release: IMF Soliciting Public Comment Related to the Design of an Operational Framework for Assessing Debt Sustainability in Low-Income Countries, July 15, 2003

Debt Sustainability in Low-Income Countries—Towards a Forward-Looking Strategy, May 5, 2003

Debt Sustainability in Low-Income Countries - Report on Workshops in Paris, Berlin, and Accra - May/June 2003, July 9, 2003

Debt Initiative for the Heavily Indebted Poor Countries (HIPCs)
A Factsheet

Heavily Indebted Poor Countries (HIPCs)—Documents

Sustainability Assessments—Review of Application and Methodological Refinements

Prepared by the Policy Development and Review Department
In collaboration with the Monetary and Financial Systems Department and in Consultation with Other Departments

June 10, 2003

Use the free Adobe Acrobat Reader to view the full text (898 kb pdf file)


  1. Introduction

  2. Sustainability Assessments: Experience and Conceptual Issues
    1. Experience with Use of Sustainability Templates
    2. Assessment
    3. Summary
  1. Calibration of Sensitivity Tests
    1. Event Study Approach
    2. Stochastic Simulation Approach
         Probability Density Function of Debt Outcomes
         Calibration of Sensitivity Tests in Standard Template
    3. Summary
  1. Scenario Analysis

  2. Contingent Liabilities
    1. Stress-Test Approach
    2. Cross-Country Evidence
    3. Summary
  1. Interpreting Debt Ratios
    1. Debt Thresholds
    2. Debt-Stabilizing Primary Surplus
    3. Financing Needs
    4. Summary
  1. Proposed Changes and Enhancements
    1. Design, Use, and Resource Implications of the Standard Template
    2. Publication of Debt Sustainability Assessments
  1. Issues for Discussion


Text Tables

  1. Preparation and Publication of Debt Sustainability Analysis Using Standard Template
  2. Examples of Contingent Liabilities
  3. Estimated Costs of Banking Crisis Across Selected Financial System Indicators
  4. Revised External Debt Sustainability Template
  5. Revised Public Debt Sustainability Template


  1. Pre-Crisis Trends in Key Variables
  2. Stochastic Simulation of Debt Ratio
  3. Probabilistic Bounds and P-values
  4. Frequency Distributions of P-values of First, Second, and Third Most Extreme Sensitivity Tests
  5. Estimated Costs of Banking Crises
  6. Public and External Debt Ratios in Sovereign Debt Crisis
  7. Fitted Probability of Sovereign Debt Crisis
  8. Debt Ratio and Gross External Financing Need


  1. How Good (or Bad) are WEO Projections of External and Public Debt?
  2. Presentation of DSA in Staff Reports: An Example
  3. Retrospective Debt Sustainability Analysis in Four Capital Account Crises
  4. An Early Warning Model of Sovereign Debt Crises
  5. Proposed Enhancements to Standard Debt Sustainability Framework


  1. Errors in WEO Projections of Public and External Debt
  2. Stochastic Simulation of External Debt Ratio
  3. Cross-Country Evidence on the Cost of Banking Crises
  4. Methods Employed by Investment Houses and Rating Agencies for Assessing Debt Sustainability


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