Vanuatu - Joint World Bank-IMF Debt Sustainability Analysis
The updated DSA suggests that the external risk of debt distress for Vanuatu remains moderate with limited space to absorb shocks. All external debt indicators remain below the relevant indicative thresholds under the baseline scenario, incorporati...
| Main Authors: | , |
|---|---|
| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/633011570640430738/Vanuatu-Joint-World-Bank-IMF-Debt-Sustainability-Analysis-June-2019 http://hdl.handle.net/10986/32563 |
| id |
okr-10986-32563 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-325632021-05-25T09:28:30Z Vanuatu - Joint World Bank-IMF Debt Sustainability Analysis World Bank International Monetary Fund DEBT SERVICE BURDEN DEBT DISTRESS CONTINGENT LIABILITY PUBLIC AND PUBLICLY GUARANTEED DEBT PUBLIC SECTOR DEBT EXTERNAL DEBT SUSTAINABILITY ANALYSIS RISK ASSESSMENT MACROECONOMIC PROJECTION VULNERABILITY NATURAL DISASTER CYCLONE The updated DSA suggests that the external risk of debt distress for Vanuatu remains moderate with limited space to absorb shocks. All external debt indicators remain below the relevant indicative thresholds under the baseline scenario, incorporating the average long-term effects of natural disasters on growth and the fiscal and current account balances. A tailored natural disaster shock, reflecting Vanuatu’s vulnerability to disasters, would cause the present value (PV) of public and publicly guaranteed (PPG) external debt-to-GDP ratio to breach the threshold from 2024 onwards. The overall risk of debt distress is assessed as moderate. Although the PV of the public-debt-to-GDP ratio remains below the 55 percent benchmark under the baseline scenario, the public-debt-to-GDP ratio would breach the authorities' debt ceiling of 60 percent by 2025. Moreover, a tailored natural disaster shock would lead to a significant deterioration in debt sustainability, breaching the benchmark. The breach of the authorities’ debt ceiling and of the benchmark indicates the need for rebuilding fiscal buffers and enhancing resilience against shocks, including from natural disasters. This requires both stronger revenue mobilization measures, including an introduction of the proposed income taxes, and expenditure rationalization in the medium term. When contracting new public infrastructure projects, the authorities are encouraged to seek grants or concessional loans as much as possible to contain its debt burden. 2019-10-17T18:21:56Z 2019-10-17T18:21:56Z 2019-06 Report http://documents.worldbank.org/curated/en/633011570640430738/Vanuatu-Joint-World-Bank-IMF-Debt-Sustainability-Analysis-June-2019 http://hdl.handle.net/10986/32563 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work Economic & Sector Work :: Debt and Creditworthiness Study East Asia and Pacific Vanuatu |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
DEBT SERVICE BURDEN DEBT DISTRESS CONTINGENT LIABILITY PUBLIC AND PUBLICLY GUARANTEED DEBT PUBLIC SECTOR DEBT EXTERNAL DEBT SUSTAINABILITY ANALYSIS RISK ASSESSMENT MACROECONOMIC PROJECTION VULNERABILITY NATURAL DISASTER CYCLONE |
| spellingShingle |
DEBT SERVICE BURDEN DEBT DISTRESS CONTINGENT LIABILITY PUBLIC AND PUBLICLY GUARANTEED DEBT PUBLIC SECTOR DEBT EXTERNAL DEBT SUSTAINABILITY ANALYSIS RISK ASSESSMENT MACROECONOMIC PROJECTION VULNERABILITY NATURAL DISASTER CYCLONE World Bank International Monetary Fund Vanuatu - Joint World Bank-IMF Debt Sustainability Analysis |
| geographic_facet |
East Asia and Pacific Vanuatu |
| description |
The updated DSA suggests that the
external risk of debt distress for Vanuatu remains moderate
with limited space to absorb shocks. All external debt
indicators remain below the relevant indicative thresholds
under the baseline scenario, incorporating the average
long-term effects of natural disasters on growth and the
fiscal and current account balances. A tailored natural
disaster shock, reflecting Vanuatu’s vulnerability to
disasters, would cause the present value (PV) of public and
publicly guaranteed (PPG) external debt-to-GDP ratio to
breach the threshold from 2024 onwards. The overall risk of
debt distress is assessed as moderate. Although the PV of
the public-debt-to-GDP ratio remains below the 55 percent
benchmark under the baseline scenario, the
public-debt-to-GDP ratio would breach the authorities'
debt ceiling of 60 percent by 2025. Moreover, a tailored
natural disaster shock would lead to a significant
deterioration in debt sustainability, breaching the
benchmark. The breach of the authorities’ debt ceiling and
of the benchmark indicates the need for rebuilding fiscal
buffers and enhancing resilience against shocks, including
from natural disasters. This requires both stronger revenue
mobilization measures, including an introduction of the
proposed income taxes, and expenditure rationalization in
the medium term. When contracting new public infrastructure
projects, the authorities are encouraged to seek grants or
concessional loans as much as possible to contain its debt burden. |
| format |
Report |
| author |
World Bank International Monetary Fund |
| author_facet |
World Bank International Monetary Fund |
| author_sort |
World Bank |
| title |
Vanuatu - Joint World Bank-IMF Debt Sustainability Analysis |
| title_short |
Vanuatu - Joint World Bank-IMF Debt Sustainability Analysis |
| title_full |
Vanuatu - Joint World Bank-IMF Debt Sustainability Analysis |
| title_fullStr |
Vanuatu - Joint World Bank-IMF Debt Sustainability Analysis |
| title_full_unstemmed |
Vanuatu - Joint World Bank-IMF Debt Sustainability Analysis |
| title_sort |
vanuatu - joint world bank-imf debt sustainability analysis |
| publisher |
World Bank, Washington, DC |
| publishDate |
2019 |
| url |
http://documents.worldbank.org/curated/en/633011570640430738/Vanuatu-Joint-World-Bank-IMF-Debt-Sustainability-Analysis-June-2019 http://hdl.handle.net/10986/32563 |
| _version_ |
1764476802872377344 |