## Benchmarking Dynamically Stable Public Debt Trajectories for Low-Income Countries

_IMF Working Papers, April 10, 2026_

## Source details

**Canonical URL:** [Benchmarking Dynamically Stable Public Debt Trajectories for Low-Income Countries](https://www.imf.org/en/publications/wp/issues/2026/04/10/benchmarking-dynamically-stable-public-debt-trajectories-for-low-income-countries-575351)

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## Bibliographic details
- Authors: Plamen K Iossifov, Ali Abbas, Lennart Niermann
- Published: April 10, 2026
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229044363.001

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### Objective and scope
- Develop two complementary approaches for benchmarking public debt trajectories of Low-Income Countries (LICs) to assess their dynamic stability.
- Focus on the evolution of overall public debt-to-GDP ratios of reference LICs.
- Compare reference LICs with historical experiences of other countries that: (a) have similar characteristics, and (b) are now further down the path of economic development and have not experienced public debt stress events.
- Aim: provide insights for debt sustainability analyses for LICs.

### Methods
- Two complementary approaches:
  - Direct comparison of public debt-to-GDP ratios between reference LICs and selected historical comparators.
  - A novel application of the synthetic control method (SCM).
- Emphasis on identifying public debt trajectories that are dynamically stable from a historical perspective.

### Key findings and analytical insights
- The paper establishes benchmarking procedures that identify public debt trajectories deemed dynamically stable in historical experience.
- These dynamically stable trajectories can provide insights into debt sustainability analyses for LICs.
- Use of SCM is highlighted as a novel methodological contribution for constructing counterfactual/comparator trajectories for LICs.

### Policy relevance and implications
- Benchmarked dynamically stable public debt trajectories serve as historical reference points to inform LIC debt sustainability analyses.
- The approaches facilitate comparisons with countries that successfully avoided public debt stress events while advancing in economic development.
- Results can inform fiscal policy design and fiscal stance assessments in LICs by highlighting historically observed sustainable paths of public debt-to-GDP ratios.

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## Content in this bundle

- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2026/04/10/benchmarking-dynamically-stable-public-debt-trajectories-for-low-income-countries-575351_