## Evolution of Debt Sustainability Analysis in Low-Income Countries: Some Aggregate Evidence

_IMF Working Papers, June 1, 2012_

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**Canonical URL:** [Evolution of Debt Sustainability Analysis in Low-Income Countries: Some Aggregate Evidence](https://www.imf.org/en/publications/wp/issues/2016/12/31/evolution-of-debt-sustainability-analysis-in-low-income-countries-some-aggregate-evidence-26025)

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## Bibliographic details
- Authors: Benedicte Baduel, Robert T Price
- Published: June 1, 2012
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475505153.001

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### Overview and purpose
- The Debt Sustainability Analysis (DSA) for low-income countries (LICs) is a standardized analytical tool to monitor debt sustainability.
- This paper uses DSAs from three periods around the time of the global economic crisis to analyze the projected trajectories of debt ratios for a sample of LICs.

### Key findings (aggregate evidence)
- LIC vulnerabilities improved on the whole during the period prior to the crisis.
- The crisis had a strong short-run impact on key debt ratios:
  - debt-to-GDP
  - debt-to-exports
  - debt-to-fiscal revenues
- The crisis also had a strong short-run impact on debt service ratios:
  - debt service-to-exports
  - debt service-to-revenues
- Although projected debt burdens increased following the crisis, debt indicators tend to return to their pre-crisis levels over the projection horizon.

### Interpretation and possible explanations
- The observed return of debt indicators to pre-crisis levels over the projection horizon may reflect:
  - a strong and durable policy response by LICs towards the crisis, or
  - specific assumptions on the long-run growth dividends of public external debt.

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## Content in this bundle

- **1. Sample Countries**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/evolution-of-debt-sustainability-analysis-in-low-income-countries-some-aggregate-evidence-26025_