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From Judgmental Projection to Time Series Forecast: Does it Alter the Debt Sustainability Analysis of Bangladesh?

Author

Listed:
  • GOSWAMI , GOUR GOBINDA

    (Professor, Department of Econ omics and Treasurer (in charge), North South University (NSU), Dhaka, Bangladesh)

  • HOSSAIN, MOHAMMAD MASHNUN

    (BS in Economics degree from the Department of Economics, NSU)

Abstract

Debt Sustainability Analysis (DSA) conducted by the multilateral organisations like the World Bank and IMF falls under the domain of Judgmental Projection reflecting their views or judgment about the economy. The study incorporates time series forecast using ARIMA method to analyse debt sustainability in practice in Bangladesh. More specifically, macro, fiscal, current account and debt variables have been forecasted according to the requirement of debt sustainability framework (DSF) for use in a standard DSA template. Using the time series forecast based inputs, the study concludes that debt is sustainable for Bangladesh for the period 2013-2033 based on the standard country specific debt burden threshold. The study notes that the results produced by different methodologies broadly follow similar path. However, time series forecasts imply a better economic situation in terms of improved repayment capacity compared with judgmental projection.

Suggested Citation

  • Goswami , Gour Gobinda & Hossain, Mohammad Mashnun, 2013. "From Judgmental Projection to Time Series Forecast: Does it Alter the Debt Sustainability Analysis of Bangladesh?," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 36(3), pages 1-41, September.
    • Handle: RePEc:ris:badest:0559
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    References listed on IDEAS

    as
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    4. Wilcox, David W, 1989. "The Sustainability of Government Deficits: Implications of the Present-Value Borrowing Constraint," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 21(3), pages 291-306, August.
    5. Mr. Aasim M. Husain & Chakriya Bowman, 2004. "Forecasting Commodity Prices: Futures Versus Judgment," IMF Working Papers 2004/041, International Monetary Fund.
    6. Mr. Nigel A Chalk & Mr. Richard Hemming, 2000. "Assessing Fiscal Sustainability in Theory and Practice," IMF Working Papers 2000/081, International Monetary Fund.
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    More about this item

    Keywords

    DSA; Bangladesh; ARIMA; Time Series Forecasting;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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