## Debt Sustainability Analyses for Low-Income Countries: An Assessment of Projection Performance

_IMF Working Papers, October 30, 2017_

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## Bibliographic details
- Authors: Henry Mooney, Constance de Soyres
- Published: October 30, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484324790.001

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### Scope and methods
- Coverage: debt sustainability analyses (DSAs) for low-income countries (LICs) from 2005-2015.
- Contribution: develops new error assessment methods to evaluate the performance of LIC DSAs.
- Publication details:
  - Authors: Henry Mooney, Constance de Soyres
  - Date: October 30, 2017
  - Series: IMF Working Papers, Working Paper No. 2017/220
  - Pages: 48
  - Issue: 220
  - DOI: https://doi.org/10.5089/9781484324790.001
  - ISBN: 9781484324790
  - ISSN: 1018-5941

### Key findings on projection performance
- Evidence of a bias towards optimism for public and external debt projections over 2005-2015.
- Biases were most appreciable for LICs with:
  - the highest incomes,
  - prospects for market access,
  - and at “moderate” risk of debt distress.
- Primary drivers of optimistic projections included:
  - overly-ambitious fiscal forecasts,
  - overly-ambitious growth forecasts,
  - and projected “residuals.”
- When controlling for unanticipated shocks, biases remained evident and were driven in part by:
  - optimism regarding government fiscal reaction functions,
  - optimism regarding expected growth dividends from investment.

### Subjects and keywords (as listed)
- Subject: Debt sustainability analysis, External debt, Government debt management, Oil prices, Prices, Public debt, Public financial management (PFM)
- Keywords: balance of payments, debt relief, Debt sustainability analysis, debt sustainability analysis (DSA), DSA bias, DSA debt projection, DSA projection, fiscal reaction function, forecast error, Global, Government debt management, growth-investment nexus, IMF, IMF DSA database, IMF-World Bank LIC-DSA framework, Low-Income Countries, macroeconomic forecast, Oil prices, projection accuracy, projection bias, projection error, real GDP, sovereign debt, World Bank, WP

*IMF Working Paper No. 2017/220 — "Debt Sustainability Analyses for Low-Income Countries: An Assessment of Projection Performance", Henry Mooney and Constance de Soyres, October 30, 2017.*

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_Source: https://www.imf.org/en/publications/wp/issues/2017/10/30/debt-sustainability-analyses-for-low-income-countries-an-assessment-of-projection-performance-45333_