## Public Debt Vulnerabilities in Low-Income Countries - The Evolving Landscape

_Policy Papers, November 3, 2015_

## Source details

**Canonical URL:** [Public Debt Vulnerabilities in Low-Income Countries - The Evolving Landscape](https://www.imf.org/en/publications/policy-papers/issues/2016/12/31/public-debt-vulnerabilities-in-low-income-countries-the-evolving-landscape-pp5004)

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## Bibliographic details
- Published: November 3, 2015
- Series: Policy Papers

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### Summary
- This is the first joint IMF/World Bank report on public debt vulnerabilities in low income countries (LICs).
- It examines debt-related developments and their underlying causes since the onset of the global financial crisis.
- The findings will inform the upcoming review of the IMF/WB debt sustainability framework for LICs.
- Publication date: November 3, 2015.

### Key findings
- Improved macroeconomic performance in LICs, combined with HIPC/MDRI debt relief and high demand for commodities, contributed to improved LIC creditworthiness.
- New borrowing opportunities emerged due to:
  - accommodative liquidity conditions in international capital markets,
  - the deepening of domestic financial markets for some LICs,
  - growing lending activities of non-Paris Club countries.
- These new financing possibilities helped mitigate the decline in Paris Club lending to LICs.
- There has been an associated shift toward greater reliance on non-concessional credit.
- The changing financing landscape has been most significant for frontier LICs.

### Drivers and mechanisms
- HIPC/MDRI debt relief: contributed to improved creditworthiness.
- Commodity demand: high demand supported LIC macroeconomic performance.
- International capital markets: accommodative liquidity created new borrowing avenues.
- Domestic financial deepening: expanded options for some LICs.
- Non-Paris Club lending: growing role altered creditor composition and financing terms.

### Policy relevance and use
- The report’s findings are intended to inform the upcoming review of the IMF/WB debt sustainability framework for LICs.
- Subject areas highlighted: Debt relief, External borrowing, Fiscal risk, HIPC Initiative, Low-income developing countries, Multilateral debt relief initiative, Public debt.

*Source: Public Debt Vulnerabilities in Low-Income Countries - The Evolving Landscape — https://www.imf.org/en/publications/policy-papers/issues/2016/12/31/public-debt-vulnerabilities-in-low-income-countries-the-evolving-landscape-pp5004*

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_Source: https://www.imf.org/en/publications/policy-papers/issues/2016/12/31/public-debt-vulnerabilities-in-low-income-countries-the-evolving-landscape-pp5004_