## The Debt Sustainability Framework for Low-Income Countries

_Occasional Papers, February 25, 2009_

## Source details

**Canonical URL:** [The Debt Sustainability Framework for Low-Income Countries](https://www.imf.org/en/publications/occasional-papers/issues/2016/12/31/the-debt-sustainability-framework-for-low-income-countries-21531)

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## Bibliographic details
- Authors: Christian H. Beddies, Marie-Helene Le Manchec, Bergljot B Barkbu
- Published: February 25, 2009
- Series: Occasional Papers
- DOI: https://doi.org/10.5089/9781589067929.084

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### Summary
- Low-income countries continue to face significant challenges in meeting their vast development needs while maintaining a sustainable debt position, even after many of these countries have benefited from substantial debt relief.
- Challenges are further exacerbated by changes in the financial landscape, including:
  - the emergence of new creditors and investors;
  - the use of more complex financing vehicles;
  - the development of domestic markets.
- The joint World Bank/IMF debt sustainability framework is positioned to help address these challenges and reduce the risks of renewed episodes of debt distress.
- This paper explains the analytical underpinnings of the framework and the means to ensure its full effectiveness.

### Key findings and analytical focus
- The framework provides an analytical basis for assessing debt sustainability in low-income countries (LICs).
- Core analytical themes include:
  - Debt service and debt sustainability analysis.
  - External debt and public debt dynamics.
  - Identification of distress thresholds and debt-service difficulty.
  - Consideration of LIC borrowing decisions and financing strategies.
- Geographic and thematic scope highlighted in keywords: Africa, Western Hemisphere, Global, LIC, LICS' development.

### Implications for policy and practice
- The framework aims to inform policy by:
  - Helping manage the trade-off between meeting development needs and maintaining sustainable debt positions.
  - Guiding the assessment of risks from new creditors, complex instruments, and evolving domestic markets.
  - Reducing the risk of renewed episodes of debt distress through improved analytical underpinnings and implementation measures.

*Source: The Debt Sustainability Framework for Low-Income Countries, Christian H. Beddies, Marie-Helene Le Manchec, Bergljot B Barkbu, February 25, 2009 (Occasional Paper No. 2009/001).*

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_Source: https://www.imf.org/en/publications/occasional-papers/issues/2016/12/31/the-debt-sustainability-framework-for-low-income-countries-21531_