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This paper proposes a new framework for the analysis of public sector debt sustainability. The framework uses concepts and methods from modern practice of contingent claims to develop a quantitative risk-based model of sovereign credit risk. The motivation in developing this framework is to provide a clear and workable complement to traditional debt sustainability analysis which-although it has many useful applications-suffers from the inability to measure risk exposures, default probabilities and credit spreads. Importantly, this new framework can be adapted for policy analysis, including debt and reserve management.

Exports and Imports --- Public Finance --- International Lending and Debt Problems --- Debt --- Debt Management --- Sovereign Debt --- International economics --- Public finance & taxation --- Local currency debt --- Foreign currency debt --- Debt sustainability --- Debt sustainability analysis --- Public debt --- Debts, External --- Debts, Public --- United States

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This paper proposes a framework for public debt sustainability analysis (DSA) that is complementary to that generally used by IFIs. The DSA in this paper has three components: (i) an integrated and consistent accounting framework for the Consolidated Public Sector (CPS); (ii) the estimation of an appropriate, and country-specific debt threshold, following the approach proposed by Reinhart, Rogoff and Savastano (2003); and (iii) a method for the calculation of the CPS primary balance to achieve the desired debt targets, without resorting to ad-hoc assumptions for the values of the macroeconomic variables during the planning horizon, in the spirit of Garcia and Rigobon (2004) and Celasun, Debrun and Ostry (2006). The paper uses this approach to analyze the sustainability of the Dominican Republic's Public Debt.

Banks and Banking --- Exports and Imports --- Financial Risk Management --- Macroeconomics --- Public Finance --- Fiscal Policy --- Debt --- Debt Management --- Sovereign Debt --- Monetary Policy --- International Lending and Debt Problems --- Public finance & taxation --- Banking --- International economics --- Finance --- Fiscal stance --- Public debt --- International reserves --- Debt sustainability analysis --- Debt reduction --- Fiscal policy --- Debts, Public --- Foreign exchange reserves --- Debts, External --- Dominican Republic

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The staff report for the First Review Under the Poverty Reduction and Growth Facility (PRGF) Arrangement highlights Grenada’s economic performance in many respects. The time needed to address the unregulated bank, as well as fiscal slippages and the slow pace of structural reform, delayed completion of the first PRGF review. The program entails some risks, particularly with respect to bank restructuring costs, expenditure control, implementation capacity, and natural disasters. The government is considering a concessional loan from the Export-Import Bank of China to finance the construction of a port and marina.

Banks and Banking --- Exports and Imports --- Macroeconomics --- Public Finance --- Debt --- Debt Management --- Sovereign Debt --- International Lending and Debt Problems --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Fiscal Policy --- Public Enterprises --- Public-Private Enterprises --- National Government Expenditures and Related Policies: Infrastructures --- Other Public Investment and Capital Stock --- Public finance & taxation --- International economics --- Banking --- Civil service & public sector --- Public debt --- External debt --- Fiscal stance --- Debt sustainability --- Fiscal policy --- Debt sustainability analysis --- Debts, Public --- Debts, External --- Banks and banking --- Finance, Public --- Capital investments --- Grenada

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This paper discusses key findings of the Fourth Review Under the Poverty Reduction and Growth Facility (PRGF) for Afghanistan and a Request for Waiver of Performance Criterion. Program performance during the second half of 2007/08 fell short of expectations. The performance criterion on fiscal revenue was missed, and the authorities fell behind on several program commitments. For 2008/09, real GDP growth is projected to moderate to 7.5 percent and inflation to decelerate to 15½ percent by year’s end.

Budgeting --- Exports and Imports --- Financial Risk Management --- Public Finance --- Statistics --- Debt --- Debt Management --- Sovereign Debt --- International Lending and Debt Problems --- National Budget --- Budget Systems --- Agriculture: Aggregate Supply and Demand Analysis --- Prices --- National Government Expenditures and Related Policies: General --- Price Level --- Inflation --- Deflation --- Data Collection and Data Estimation Methodology --- Computer Programs: Other --- Public finance & taxation --- International economics --- Macroeconomics --- Finance --- Econometrics & economic statistics --- Public debt --- Debt relief --- Budget planning and preparation --- External debt --- Debt sustainability analysis --- Asset and liability management --- Public financial management (PFM) --- Debts, External --- Debts, Public --- Budget --- Food prices --- Expenditures, Public --- Economic statistics --- Afghanistan, Islamic Republic of

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This paper applies a simple probabilistic approach to debt sustainability analysis to the case of Lebanon. The paper derives "fan charts" to depict the probability distribution of the government debt to GDP ratio under a medium-term adjustment scenario, as a result of shocks to GDP growth and interest rates. The distribution of shocks is derived from the past shocks to these variables and the related variance covariance. Because we are interested in assessing the sustainability of a particular policy scenario, we do not consider independent fiscal policy shocks or the endogenous policy response to shocks.

Debts, Public --- Fiscal policy --- Econometric models. --- Lebanon --- Economic conditions --- Tax policy --- Taxation --- Debts, Government --- Government debts --- National debts --- Public debt --- Public debts --- Sovereign debt --- Government policy --- Liban --- République libanaise --- Libanon --- Lubnān --- Libanan --- Livan --- Mont-Liban (Turkey : Mutaṣarrifīyah) --- Jabal Lubnān (Turkey : Mutaṣarrifīyah) --- Levanon --- Líbano --- Livanos --- Grand Lebanon --- Grand Liban --- Lebanese Republic --- Jumhūrīyah al Lubnānīyah --- Jumhouriya al-Lubnaniya --- Republic of Lebanon --- لبنان --- جمهورية اللبنانية --- Ліван --- Ліванская Рэспубліка --- Livanskai︠a︡ Rėspublika --- Ливан --- Република Ливан --- Republika Livan --- Λίβανος --- Δημοκρατία του Λιβάνου --- Dēmokratia tou Livanou --- Jumhūrīyyah al-Lubnānīyyah --- 레바논 --- לבנון --- רפובליקה הלבנונית --- Republiḳah ha-Levanonit --- Либан --- Либанска Република --- Libanska Republika --- レバノン --- Rebanon --- レバノン共和国 --- Rebanon Kyōwakoku --- Ливанская Республика --- Республіка Ліван --- Respublika Livan --- Ліванська Республика --- Livansʹka Respublyka --- Levonen --- 黎巴嫩 --- Libanen --- Economic policy --- Finance, Public --- Debt --- Bonds --- Deficit financing --- Banks and Banking --- Exports and Imports --- Public Finance --- Debt Management --- Sovereign Debt --- Interest Rates: Determination, Term Structure, and Effects --- International Lending and Debt Problems --- Fiscal Policy --- Public finance & taxation --- Finance --- International economics --- Macroeconomics --- Debt sustainability analysis --- Deposit rates --- Real interest rates --- Interest rates --- Debts, External