The Debt Sustainability Framework for Low-Income Countries

Christian Beddies, Marie-Helene Le Manchec and Bergljot Barkbu

No 2009/001, IMF Occasional Papers from International Monetary Fund

Abstract: Low-income countries continue to face significant challenges in meeting their vast development needs while maintaining a sustainable debt position, even after many of these countries have benefited from substantial debt relief. These challenges are further exacerbated by changes in the financial landscape, including the emergence of new creditors and investors, the use of more complex financing vehicles, and the development of domestic markets. The joint World Bank/IMF debt sustainability framework is well placed to help address these challenges and reduce the risks of renewed episodes of debt distress. This paper explains the analytical underpinnings of the framework and the means to ensure its full effectiveness.

Keywords: OP; debt; financing; LIC; renewed debt problem; borrowing decisions of LIC; debt problem; LICS' development; distress threshold; Debt sustainability; Debt sustainability analysis; Debt service; Global; Africa; Western Hemisphere; traffic light system; debt-service difficulty (search for similar items in EconPapers)
Pages: 47
Date: 2009-02-25
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