Fiscal Sustainability: The Case of Eritrea

IMF Working Papers, January 1, 2004

Source details

The paper examines fiscal sustainability issues for the case of Eritrea and draws wider implications for addressing fiscal and debt sustainability.
Structure of the analysis:
- Begins with a formal definition and explanation of analytical sustainability indicators.
- Follows with an assessment of the causes of fiscal deficits and their impact on the usual indicators of fiscal and external debt sustainability.
- Goes beyond usual analytical indicators by attempting to identify how and through which channels fiscal and other economic policies have affected the behavior of endogenous variables that influence sustainability.

Formal definition and explanation of analytical sustainability indicators.
Assessment of causes of fiscal deficits and their impact on:
- Fiscal sustainability indicators.
- External debt sustainability indicators.
Identification of channels through which fiscal and other economic policies affect endogenous variables relevant to sustainability (e.g., private sector behavior, physical capital, rate of exchange rate appreciation, nominal exchange rate, inflation rate, GDP decline).

Subject: Exchange rates, External debt, Fiscal policy, Fiscal stance, Fiscal sustainability, Foreign exchange, Public debt
Keywords: Assets and liabilities, debt indicator, debt stock, Endogenous response, Exchange rates, Fiscal stance, Fiscal sustainability, gap indicator, GDP decline, GDP ratio, inflation rate, nominal exchange rate, physical capital, posited deficit objective, private sector, rate of exchange rate appreciation, WP

Fiscal Sustainability -- The Case of Eritrea by Ayumu Yamauchi -- IMF Working Paper No. 04/7
- Fiscal Sustainability -- The Case of Eritrea by Ayumu Yamauchi -- IMF Working Paper No. 04/7 (Markdown version)
- Fiscal Sustainability -- The Case of Eritrea by Ayumu Yamauchi -- IMF Working Paper No. 04/7 (PDF)