Analyzing Debt Sustainability: Concepts and Tools Applied for Guinea, Rwanda,and Senegal
A sustainable debt is a precondition for sustainable development. Yet the analysis of a country’s debt sustainability is a complex task given issues related to (1) establishing the actual debt outstanding and future debt-service obligations; (2) defining appropriate sustainability indicators; and (3) projecting future macroeconomic variables like gross domestic product, exports, interest rates, inflation rates, and exchange rates. These projections are crucial because debt sustainability analysis is necessarily forward-looking and highly sensitive to changes in these macroeconomic variables. This paper provides a case study of debt sustainability analysis in three African countries to illustrate the key concepts and complexities involved in such analysis. We begin with an overview of the main debt sustainability indicators as they typically are used in practice. We then provide a brief historical review of previous and current debt relief initiatives and illustrate how they have been applied in each of the three countries. The paper then presents the debt sustainability analyses using a recently developed simulation tool (SimSIP Debt).
|Date of creation:||Jan 2008|
|Publication status:||Published in Public Finance for Poverty Reduction: Concepts and Case Studies from Africa and Latin America (edited by Blanca Moreno-Dodson and Quentin Wodon, published in World Bank Directions in Development) (2008): pp. 311-344|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
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- Gunter, Bernhard G., 2001.
"Does the HIPC Initiative Achieve its Goal of Debt Sustainability?,"
WIDER Working Paper Series
100, World Institute for Development Economic Research (UNU-WIDER).
- Bernhard G. Gunter, 2010. "Does the HIPC Initiative Achieve its Goal of Debt Sustainability?," Working Papers id:3205, eSocialSciences.
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