External Debt Sustainability in HIPC Completion Point Countries: An Update
IMF Working Papers, June 1, 2009
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- External Debt Sustainability in HIPC Completion Point Countries: An Update
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Bibliographic details
- Authors: Jie Yang, Dan Nyberg
- Published: June 1, 2009
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451872750.001
Summary findings
- Despite substantial debt relief to HIPC Initiative completion point countries, long-term debt sustainability remains a challenge.
- The paper examines a number of structural factors affecting external debt sustainability.
- Key diagnostic findings:
- (i) the export base broadly remains narrow;
- (ii) fiscal revenue mobilization lags behind in some countries; and
- (iii) policy and institutional frameworks are still relatively weak.
- Conclusion: Achieving and maintaining long-term debt sustainability in completion point countries will require continued structural reforms, timely donor support, and close monitoring of new non-concessional borrowing.
Structural factors affecting external debt sustainability
- Export structure:
- The export base broadly remains narrow in HIPC completion point countries.
- Fiscal capacity:
- Fiscal revenue mobilization lags behind in some countries.
- Policy and institutions:
- Policy and institutional frameworks are still relatively weak.
Policy recommendations and monitoring priorities
- Continued structural reforms to broaden economic bases and strengthen resilience.
- Timely donor support to ensure financing needs are met without resorting to destabilizing borrowing.
- Close monitoring of new non-concessional borrowing to prevent erosion of debt sustainability gains.