Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the first review of the ECF-arrangement for Togo. The Board’s decision enables the immediate disbursement of SDR 44.0 million (about US$ 58.7 million), which will be used for budget support. The ECF-arrangement provides overall financing of SDR 293.60 million (about US$ 390 million).
The IMF approved the ECF-arrangement on March 1st, 2024 (see Press Release No. 24/64) to help the authorities address the legacies of the shocks seen since 2020, notably the COVID-pandemic and the increase in global food and fuel prices. The Togolese authorities were able to lessen these shocks’ impacts on the Togolese economy and population. However, this resulted in an increase in fiscal deficits and debt. The IMF-supported government program aims to (i) make growth more inclusive while strengthening debt sustainability, and (ii) implement structural reforms to support growth and limit financial sector and associated fiscal risks.
The medium-term outlook is broadly favorable, with continued robust growth. Economic growth reached an estimated 5.6 percent in 2023 and is projected at 5.3 percent in 2024-25 and around 5.5 percent per year thereafter according to IMF staff projections, barring major adverse shocks. Headline inflation eased to 3.3 percent in October 2024 and core inflation (which excludes the prices of food and transport) to 2.2 percent (annual averages).
However, the outlook is subject to high risks. In particular, terrorist attacks in the country’s North continues unabated and appears to be intensifying, putting pressure on spending. The authorities are contending with the challenging trade-offs between fiscal consolidation to lower the debt burden and the need to maintain robust growth in the context of limited fiscal space.
Implementation of the program is on track. The authorities have met all end-June quantitative performance criteria, and prospects for meeting the quantitative targets for the rest of the year are favorable. The authorities also have met two out of the four due structural benchmarks, and there are prospects for the authorities to deliver at a later stage on the limited elements that have led to the missing of two benchmarks. Further, prospects for meeting the two end-December benchmarks are good. Finally, the authorities have made good progress on the reform of the remaining state-owned bank.
At the conclusion of the Executive Board’s discussion, Mr. Bo Li, Deputy Managing Director, and Acting Chair, made the following statement:
"The Togolese authorities have shown strong implementation of the program supported under the Extended Credit Facility (ECF). The authorities have met all quantitative targets despite security challenges and tight financing conditions, and they have progressed on structural reforms to strengthen revenue mobilization, inclusion, and public financial management.
"Togo’s outlook is subject to elevated risks, broadly as at the program request in March 2024, while security conditions have deteriorated. In line with this, the design of the program as conceived at the outset remains broadly appropriate, and the authorities should continue to implement the program with determination to place the country on the path of strong and sustainable growth.
"In the area of fiscal policies, the authorities should continue to aim to address debt vulnerabilities in a context of regional vulnerabilities while supporting growth and enhancing inclusion. For this, it will be important to implement the agreed fiscal anchor by limiting fiscal deficits to 3 percent of GDP from 2025 onwards, continue to raise tax revenue while making taxation more efficient, and implement structural reforms to enhance the efficiency of spending and make the social safety net more effective and efficient.
"It will also be essential to continue efforts to strengthen governance. The authorities’ recent request for an IMF Governance Diagnostic is welcome, as is their commitment to strengthening beneficial ownership declarations for companies benefiting from public procurement contracts. On the financial sector, the authorities should continue the reform of the remaining public bank by bringing the bank’s capital in line with regulatory requirements and reforming its operations to ensure its stability and profitability. Efforts to strengthen the AML/CFT framework will also be important.
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Togo: Selected Economic and Financial Indicators, 2020–29
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2020
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2021
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2022
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2023
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2024
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2025
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2026
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2027
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2028
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2029
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Estimates
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Projections
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(Percentage change, unless otherwise indicated)
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Real GDP
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2.0
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6.0
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5.8
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5.6
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5.3
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5.3
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5.5
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5.5
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5.5
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5.5
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Real GDP per capita
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-0.4
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3.5
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3.3
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3.1
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2.8
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2.8
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3.0
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3.0
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3.0
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3.0
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GDP deflator
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1.8
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2.5
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3.7
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2.9
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2.2
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2.0
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2.0
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2.0
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2.0
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2.0
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Consumer price index (average)
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1.8
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4.5
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7.6
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5.3
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3.3
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2.3
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2.0
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2.0
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2.0
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2.0
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GDP (CFAF billions)
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4253
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4621
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5069
|
5507
|
5927
|
6366
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6850
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7371
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7932
|
8536
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Exchange rate CFAF/US$ (annual average level)
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575
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554
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622
|
606
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…
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…
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…
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…
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…
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…
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Real effective exchange rate (appreciation = –)
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-2.0
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-1.4
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2.3
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-5.4
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…
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…
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…
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…
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…
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…
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Terms of trade (deterioration = –)
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-1.4
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6.6
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23.3
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3.4
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0.9
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-1.7
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-0.8
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1.4
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1.3
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0.4
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Monetary survey
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(Percentage change of beginning-of-period broad money)
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Net foreign assets
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14.1
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5.6
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-0.6
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6.2
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4.9
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-0.1
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3.0
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2.8
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2.2
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2.2
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Net credit to government
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-1.6
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-0.3
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8.0
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0.2
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-2.9
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1.0
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1.2
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2.0
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0.2
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0.2
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Credit to nongovernment sector
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0.2
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6.0
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10.7
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1.5
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7.3
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6.5
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4.4
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4.6
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4.9
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4.8
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Broad money (M2)
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11.4
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12.3
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14.9
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8.5
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8.8
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7.4
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7.6
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7.6
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7.6
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7.6
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Velocity (GDP/end-of-period M2)
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2.1
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2.1
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2.0
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2.0
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2.0
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2.0
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2.0
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2.0
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2.0
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2.0
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Investment and savings
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|
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Gross domestic investment
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21.4
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23.4
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25.9
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28.0
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25.7
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24.2
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25.0
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25.9
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26.7
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27.2
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Government
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9.3
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8.2
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9.7
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11.5
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9.0
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7.1
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7.7
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8.4
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8.9
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9.4
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Nongovernment
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12.1
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15.2
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16.2
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16.5
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16.7
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17.1
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17.3
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17.5
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17.8
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17.8
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Gross national savings
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21.1
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21.2
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22.5
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25.1
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22.7
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21.2
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22.4
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23.7
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24.7
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25.2
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Government
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2.2
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3.6
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1.4
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4.8
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4.1
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4.1
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4.7
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5.4
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5.8
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6.4
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Nongovernment
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18.9
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17.6
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21.0
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20.3
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18.6
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17.1
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17.7
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18.3
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18.9
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18.8
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Government budget
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|
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Total revenue and grants
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16.6
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17.1
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17.6
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19.8
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18.8
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18.6
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19.1
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19.5
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19.9
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20.3
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Revenue
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14.1
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15.3
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15.1
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16.8
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16.6
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17.1
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17.6
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18.1
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18.5
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19.1
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Tax revenue
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12.5
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14.0
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13.9
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14.8
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15.2
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15.7
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16.2
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16.7
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17.2
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17.7
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Expenditure and net lending (excl. banking sector operation)
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23.7
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21.8
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26.0
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26.6
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23.7
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21.6
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22.0
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22.6
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22.9
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23.3
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Overall primary balance (commitment basis, incl. grants)
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-4.7
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-2.5
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-5.9
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-3.9
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-3.7
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-0.5
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-0.6
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-0.8
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-1.0
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-1.1
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Overall balance (commitment basis, incl. grants, excl. banking sector operations)
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-7.0
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-4.7
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-8.3
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-6.7
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-4.9
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-3.0
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-3.0
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-3.0
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-3.0
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-3.0
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Overall balance (commitment basis, incl. grants)
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-7.0
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-4.7
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-8.3
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-6.7
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-6.4
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-3.0
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-3.0
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-3.0
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-3.0
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-3.0
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Overall primary balance (cash basis, incl. grants)
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-4.7
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-3.4
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-5.9
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-3.9
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-3.7
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-0.5
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-0.6
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-0.8
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-1.0
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-1.1
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Overall balance (cash basis, incl. grants, excl. banking sector operations)
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-7.1
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-5.6
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-8.3
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-6.7
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-4.9
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-3.0
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-3.0
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-3.0
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-3.0
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-3.0
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Overall balance (cash basis, incl. grants)
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-7.1
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-5.6
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-8.3
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-6.7
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-6.4
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-3.0
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-3.0
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-3.0
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-3.0
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-3.0
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External sector
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|
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Current account balance
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-0.3
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-2.2
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-3.5
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-2.9
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-3.0
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-2.9
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-2.6
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-2.2
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-2.0
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-2.0
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Exports (goods and services)
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23.3
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23.7
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26.6
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25.5
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25.7
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25.6
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26.0
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26.2
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26.2
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26.1
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Imports (goods and services)
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-32.3
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-34.0
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-38.8
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-36.2
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-35.4
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-34.4
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-33.9
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-33.7
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-33.5
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-33.5
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External public debt1
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27.6
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27.3
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26.2
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25.9
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29.5
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29.0
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29.9
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30.6
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30.8
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30.4
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|
External public debt service (percent of exports)1
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6.9
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5.2
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8.3
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8.2
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8.4
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15.5
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9.2
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8.3
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7.2
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6.5
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|
Domestic public debt2
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34.6
|
37.6
|
41.2
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42.1
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40.2
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39.1
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36.6
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34.3
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32.3
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31.4
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Total public debt3
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62.2
|
64.9
|
67.4
|
68.0
|
69.7
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68.2
|
66.4
|
64.8
|
63.1
|
61.8
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|
Total public debt (excluding SOEs)4
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60.1
|
63.0
|
65.8
|
66.6
|
68.6
|
67.2
|
65.6
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64.1
|
62.5
|
61.3
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|
Present value of total public debt3
|
…
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…
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…
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60.6
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60.7
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57.7
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54.5
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51.5
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48.8
|
47.1
|
|
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Sources: Togolese authorities and IMF staff estimates and projections.
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1 Includes state-owned enterprise external debt.
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2 Includes domestic arrears and state-owned enterprise domestic debt.
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3 Includes domestic arrears and state-owned enterprise debt.
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4 Includes domestic arrears.
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