Debt Sustainability Framework for Low Income Countries

Source details

Target audience:
- Officials from ministries of finance, debt agencies, central banks, and other government agencies responsible for providing advice or implementing macroeconomic and debt policies.
Qualifications:
- Some knowledge of economics would be helpful.
- Basic Microsoft Excel skills are essential.

Overview:
- The course provides an overview of the World Bank-IMF Debt Sustainability Framework for Low Income Countries (LIC DSF).
- The LIC DSF was developed by the IMF and the World Bank (WB) to help low-income countries achieve their development goals while minimizing the risk of debt distress.
Structure and modules:
- Identification of data requirements and the "realism tools" used for assessing the plausibility of macroeconomic projections.
- How the LIC DSF computes a country's debt-carrying capacity, which is used for determining thresholds for debt-burden indicators.
- Analysis of baseline and stress test scenarios: when a debt-burden indicator breaches its threshold under either the baseline or stress test scenarios, this signals risk of debt distress.
- Use of judgment to arrive at a final risk rating.
Intended outcome:
- Enables participants to understand and interpret LIC DSF outputs presented in WB and IMF reports.

Identify data requirements for the use of the LIC DSF template.
Identify the steps in the production of debt risk ratings for low-income countries.
Analyze the LIC DSF realism tools.
Interpret the LIC DSF stress test scenarios.
Identify how the LIC DSF computes thresholds for debt-burden indicators.
Interpret the outputs of the debt sustainability analysis for low-income countries, as presented in WB and IMF reports.