Approved by: Prepared by the staff of the International Manuela Francisco and Abebe Adugna (IDA) Development Association (IDA) and the and Annalisa Fedelino (IMF) International Monetary Fund (IMF) GHANA: JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS Risk of external debt distress High Overall risk of debt distress High Granularity in the risk rating Sustainable Application of judgment No The authorities have made significant progress on their comprehensive debt restructuring strategy. They completed the domestic debt restructuring last year and the restructuring of their Eurobonds in October. In June 2024, they also reached agreement with the Official Creditor Committee (OCC) under the G20 Common Framework on a Memorandum of Understanding that codifies a debt treatment consistent with the IMF-supported program parameters. The DSA assumes a treatment of the residual claims of other external commercial creditors in line with the authorities’ restructuring strategy that is consistent with program parameters and comparability of treatment principles. Given their small share and with the government engaging in “good faith” negotiations, those cla ims are deemed away for the purpose of the DSA. Ghana is at high risk of debt distress due to near-term breaches of the DSA thresholds, but is expected to reach moderate risk of debt distress in the medium term as all DSA sustainability targets will be met by 2028. In particular, the PV of total debt-to-GDP and external debt service-to-revenue ratios will reach 55 1 This DSA is prepared in line with the Guidance Note of the Joint Bank-Fund Debt Sustainability Framework for Low Income Countries, February 2018 and with its 2024 Supplement. 2 The Composite Indicator (CI) score of 2.74 remains between the cut-off values for weak and strong debt-carrying capacity, 2.69 and 3.05, respectively. The CI is the weighted average of the 10-year average of the World Bank’s Country Policy and Institutional Assessment (CPIA) score and macroeconomic variables from the April 2024 WEO vintage. 1 >>> and 18 percent, respectively, by 2028. Debt is assessed to be sustainable on a forward-looking basis as the external debt restructuring is expected to be completed in line with program parameters. Stress test results show that a combined contingent liability shock would put overall public debt well above the current trajectory throughout the full DSA horizon. In addition, developments over the past few years and stress tests highlight the sensitivity of the debt ratios to commodity prices, exports, and a combination of shocks. The authorities’ reform efforts are supported under the IMF’s ECF arrangement and the World Bank’s DPO series, with debt management reforms remaining an integral part of the reform package. 1. The Debt Sustainability Analysis (DSA) covers public and publicly guaranteed (PPG) debt of the central government, with additional important liabilities of the public sector. The DSA also includes (i) explicitly guaranteed debt of other public and private sector entities including state-owned enterprises (SOEs) and (ii) certain implicitly guaranteed SOEs debt, namely: (a) Energy Sector Levy Act (ESLA) debt in the energy sector; (b) Ghana Educational Trust Fund (GETFund/Daakye) debt for education infrastructure; (c) debt related to the financing of infrastructure projects by Sinohydro and (d) gross debt of Cocobod3—one of the largest SOEs operating on non-commercial terms and largely engaging in quasi- fiscal activities. The DSA also includes the stock of domestic arrears to suppliers estimated at 6.3 percent of GDP at end-2023.4 Local governments are not able to borrow and are therefore not included in the debt coverage. 2. The financial sector clean-up and energy sector losses have weighed on government debt and continue to generate significant fiscal risks. The fiscal cost of the financial sector recapitalization (estimated to have reached 7.1 percent of GDP over 2017-21) has led to an increase in the government deficit and debt. In line with the financial sector strengthening strategy designed by the authorities after the domestic debt restructuring, the authorities have issued recapitalization bonds in December 2023 to support undercapitalized banks. Additional recapitalization costs are expected in the coming years —the total amount of the recapitalization included in the DSA baseline is still GHS 22 bn (equivalent to 2.6 percent of 2023 GDP). Regarding the energy sector, the Government has made budgetary transfers 3 In line with the treatment of SOEs laid out in the LIC DSF GN (appendix III), as Cocobod operations pose fiscal risks related to its heavy involvement in extra-budgetary spending, the DSA perimeter includes Cocobod’s total gross debt. This debt accounts for all Cocobod’s external and domestic gross liabilities, excluding the intra -year short-term syndicated trade credit that is contracted and reimbursed annually within the cocoa season to pay for cocoa purchases from farmers and cover part of operational costs. 4 In line with the LIC DSF GN (¶25-29), end-2023 domestic arrears, which amount to 6.3 percent of GDP —of which 2.8 percent of GDP constitute unpaid bills to independent power producers (IPPs); and the remaining arrears are unpaid bills to other domestic suppliers—are now included in the stock of debt, as they were recognized by the government and reconciled as part of the arrears stocktaking exercise undertaken in line with the Arrears’ Clearance and Prevention Strategy (a structural benchmark under the IMF-supported program). The DSA baseline assumes repayments over 5 years except for some IPPs that have specified a repayment plan following energy arrears negotiation. 2 >>> to cover the sector’s annual shortfalls averaging 1.7 percent of GDP between 2019 and 2021 and has accumulated arrears to independent power producers (IPPs) and fuel suppliers of 2.8 percent of GDP at end-2023. The DSA’s baseline assumes the government wil l continue to cover annual shortfalls with budget transfers going forward. Subsectors of the public sector Covered 1 Central government X 2 State and local government 3 Other elements in the general government 4 o/w: Social security fund 5 o/w: Extra budgetary funds (EBFs) 6 Guarantees (to other entities in the public and private sector, including to SOEs) X 7 Central bank (borrowed on behalf of the government) X 8 Non-guaranteed SOE debt X 1 The country's coverage of public debt The central government, central bank, government-guaranteed debt Default Used for the analysis 2 Other elements of the general government not captured in 1. 0 percent of GDP 0 3 SoE's debt (guaranteed and not guaranteed by the government) 1/ 2 percent of GDP 2 4 PPP 35 percent of PPP stock 2.4 5 Financial market (the default value of 5 percent of GDP is the minimum value) 5 percent of GDP 5 Total (2+3+4+5) (in percent of GDP) 9.4 1/ The default shock of 2% of GDP will be triggered for countries whose government-guaranteed debt is not fully captured under the country's public debt definition (1.). If it is already included in the government debt (1.) and risks associated with SoE's debt not guaranteed by the government is assessed to be negligible, a country team may reduce this to 0%. 3. Remaining potential contingent liabilities from the financial sector, SOEs and PPPs are modeled in tailored stress tests. These shocks assume an increase of the PPG debt by adding: (i) 2 percent of GDP in non-guaranteed SOE debt;5 (ii) 5 percent of GDP stemming from further financial sector costs; and (iii) 2.4 percent of GDP, the equivalent to 35 percent of the outstanding public private partnership (PPP) arrangements. 4. The DSA classifies debt based on the residency of the creditor . The stock of local-currency denominated domestic debt held by non-residents is included in the external debt in line with the LIC-DSF Guidance Note. Outstanding nonresident holdings of domestic debt decreased from $4.8 billion in 2021 (6.2 percent of GDP; 14.3 percent of public external debt) to $1.7 billion in 2023 (2.3 percent of GDP). 5. The compounded effects of large external shocks and pre-existing vulnerabilities caused a deep economic and financial crisis. The impact of the COVID-19 pandemic, the tightening in global financial conditions, and geopolitical conflicts exacerbated fiscal and debt vulnerabilities. Faced with large development needs and complex social and political situations, the government’s fiscal policy response was insufficient to maintain investors’ confidence. 5 This figure captures the non-guaranteed SOE debt that is not already included in the baseline, covering mainly non- guaranteed debt of smaller SOEs. 3 >>> This eventually resulted in a loss of international capital Sovereign Spreads (Basis points) market access in late 2021 and increasing difficulties in rolling over domestic debt—forcing the government to rely increasingly on monetary financing by the Bank of Ghana—and triggered an acute crisis. Against this backdrop, the government requested financial support from the IMF in mid-2022 and launched a public debt restructuring covering domestic debt as well external commercial and official bilateral debt in December 2022. Source: Bloomberg LP. 6. These shocks led to a sharp deterioration in Ghana’s fiscal position. After reaching more than 11 percent of GDP in 2020, and notwithstanding the government’s efforts to rein in spending and raise additional revenue, the primary deficit measured on a commitment basis remained high at 4.8 percent in 2021 and 4.3 percent in 2022.6 Rising interest payments (to more than 7 percent of GDP) brought the overall fiscal deficit to 12.0 percent of GDP in 2021 and 11.8 percent in 2022. The fiscal situation started 6 The fiscal deficit on a commitment basis takes into account the spending that has been committed but remains unpaid. On a cash basis, the primary balance improved from a 9.0 percent of GDP deficit in 2020 to a 0.1 percent of GDP surplus in 2023. 4 >>> to improve in 2023 with a reduction in the primary deficit by 4 percentage points, to 0.3 percent of GDP, while the overall budget deficit dropped to 3.6 percent. 7. Against this backdrop, public debt has increased dramatically over 2019-22. The large fiscal deficits and the economic slowdown in the wake of the pandemic led to an increase in public debt from 63 percent of GDP in 2019 to 92.7 percent of GDP at end-2022. Domestic debt reached 49.7 percent of GDP in 2022, of which 16 percent of GDP was held by the Bank of Ghana, 7 while public external debt stood at 43 percent of GDP. In 2023, Ghana’s debt stock decreased to 83 percent of GDP, mainly due to the effect of the Domestic Debt Exchange (see below) and the erosion of the domestic debt stock by inflation. 8. Liquidity pressures increased over the past few years. The debt service-to-revenue ratio reached an all-time high of 127 percent in 2020, the highest among the SSA countries and among the highest in the world. Despite the increase in debt service—particularly for domestic debt—the debt service- to-revenue indicator declined to 117.5 percent in 2022 reflecting higher government revenues due to the resumption of the economic activity after the Public Debt pandemic and higher inflation. Before the external (in percent of GDP) debt service suspension announced by the 100 90 authorities in December 2022, debt-service to 80 70 private external creditors constituted the largest 60 50 share of the external debt service payments, 40 accounting of for 69 percent in 2022, followed by 30 20 debt service to bilateral creditors with 20 percent. 10 0 Gross financing needs (GFN) reached 19.5 percent 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 of GDP in 2022, well above the market financing Domestic debt External debt risks benchmark of 14 percent. Gross financing need tensions eased in 2023 due to the external debt service suspension. 9. These developments led to higher borrowing costs and shorter maturities. Domestic debt increased from 24 percent of GDP in 2019 to 50 percent of GDP at end-2022. While the effective interest rate for government debt rose slightly from 10.8 percent in 2021 to 11 percent in 2022 on the back of rising domestic borrowing costs, the average time to maturity of public debt dropped from 8.2 years in 2021 to 7.6 years in 2022, as most of the increase in the local currency marketable debt was at short-term maturities. In addition, domestic debt service rose significantly and accounted for 81.7 percent of the public debt service burden in 2022. Since the announcement of the debt restructuring in December 2022 (see below), the authorities have mainly relied on multilateral external financing and domestic T bills issuance for their financing needs. While the cost of this domestic financing was particularly elevated —T-bill rates have risen to close to 30 percent, consistent with the BoG policy rate —banks’ demand for T-bills has been robust, given limited alternative investment options of domestic financial institutions . 10. Faced with these acute economic and financial pressures, the authorities have adjusted macroeconomic policies, launched and made progress on a comprehensive debt restructuring, 7 Bank of Ghana’s holding of domestic debt (marketable, non -marketable, SDRs on-lent and overdraft) increased from 11 percent of GDP in 2019 to 16 percent of GDP in 2022. 5 >>> and initiated wide-ranging reforms. They have accelerated fiscal consolidation, tightened monetary policy—including by eliminating monetary financing —and limited foreign exchange interventions. Under the government’s Post COVID-19 Program for Economic Growth (PC-PEG), they have initiated reforms to underpin durable adjustment, build resilience and lay the foundation for stronger and more inclusive growth. The government has also advanced its comprehensive debt restructuring to address financing constraints and restore public debt sustainability. Supported by IMF and World Bank TA, public debt management is being strengthened, including by upgrading the current securities operation infrastructure and strengthening the monitoring of contingent liabilities stemming from operations of key SOEs including by improved monitoring of SOE debt issuance.8 In this context, the authorities have requested Fund TA to develop an effective SOE oversight strategy, and training using FAD’s SOE Health Check tool was recently delivered by AFRITAC West 2. This broad policy package is supported by the IMF under an Extended Credit Facility (ECF) arrangement and the World Bank DPO series. 11. The authorities’ comprehensive debt restructuring aims at achieving debt sustainability and a moderate risk of debt distress under the LIC-DSF framework by bringing debt stock and flow ratios down to their respective thresholds. In particular, this includes a reduction in the PV of total debt- to-GDP and external debt service-to-revenue ratios to 55 and 18 percent, respectively, by 2028. The authorities are nearing completion of their debt restructuring process. The government completed its domestic debt restructuring in 2023. They announced a standstill on external commercial and bilateral debt in late December 2022 and formally requested a debt treatment under the G20’s Common Framework in early 2023. They reached an agreement-in-principle (AIP) in January 2024 with the official creditor committee (OCC) on the terms of a debt treatment in line with the financing assurances they provided in May 2023, and agreed on an MoU in June 2024. All but 4 countries have signed the MoU and the remaining signatures are expected in the coming weeks. At the same time, the OCC co-chairs are working with Ghana on preparing bilateral agreements that can serve as guides for all OCC members to implement the MoU. All bilateral agreements are expected to be signed by the end of June 2025. The Eurobond exchange was successfully finalized in October 2024, under the terms envisaged at the time of the agreement-in-principle reached with the two bondholder committees in June. The authorities are now starting negotiations with the remaining other commercial creditors (see below). With T-bills excluded from the domestic debt restructuring perimeter and the virtual elimination of monetary financing since the IMF-supported program was approved in May 2023, the government has relied only on short-term debt to finance its deficit on the domestic market, with most debt service shifting to domestic debt accordingly. The macroeconomic framework underpinning this DSA —staffs’ baseline scenario—is based on the macroeconomic trajectory envisaged under the Fund-supported program aiming to restore macroeconomic stability and debt sustainability in the medium term. This involves, in particular, implementing a fiscal adjustment program that is both realistic and feasible, appropriately tightening monetary policy, enhancing 8 The World Bank has equally been actively supporting Ghana through the Economic Management Strengthening (GEMS) Project and the Public Financial Management (PFM) for Service Delivery Program. 6 >>> exchange rate flexibility, and implementing growth-enhancing structural reforms. This DSA is based on a scenario that accounts for the full debt restructuring. 12. Ghana’s reform strategy has started bearing fruit, and signs of economic stabilization are crystallizing. The deepening economic crisis initially led to a significant downgrade in growth and a surge in inflation. With the deterioration in consumer and business confidence, real GDP growth has slowed from 5.1 percent in 2021 to 2.9 percent in 2023. Headline inflation reached 54 percent in December 2022, driven by the residual impact of the large fiscal and monetary stimulus deployed during the pandemic, soaring global energy and food prices, exchange rate depreciation, and monetary financing of the deficit. However, with sound policies, inflation declined to 22.1 percent at end-October 2024. On the back of large capital outflows, loss of market access and failure to roll over central bank FX liabilities, gross international reserves had fallen drastically in 2022 (by about $6.5 billion), reaching US$1.4 billion at end-2022,9 and since recovered to US$5 billion (end-September 2024 – 2.1 months of imports). 13. Under the DSA baseline, there would be a continued gradual improvement in macroeconomic conditions. Non-extractive growth is projected to strengthen to 5.0 percent by 2026 onwards (Text Table 3) as the drag from fiscal consolidation slows, the economy stabilizes, structural reforms start bearing fruit, and consumer and business confidence recover. Growth in extractive activities is expected to increase to around 5.0 percent within five years, buoyed by high commodity prices, recovery in the small-scale gold mining and the exploitation of new gold and oil fields. Overall, real GDP growth is expected to pick up to 4 percent in 2024 and recover gradually to reach 5 percent in 2027. This 5-percent growth rate is projected to be sustained over the long-term, as growth-enhancing structural reforms under the Government Post Covid Program for Economic Growth (PCPEG) boost productivity and help attract private investment, thereby offsetting the short-term impact of the crisis on the economy. These reforms include steps to improve the business environment—with short term reforms aiming at reducing minimum capital requirements for FDI and reforming the Public Private Partnership Act —and export competitiveness, promote entrepreneurship, strengthen public sector management, and accelerate the transition to the digital economy, as well as policies to adapt to climate change. As the tightening in macroeconomic policies takes effect, inflation is projected to gradually fall to the central bank’s target of 8 percent by end-2025, while the fiscal and external positions strengthen. The current account deficit, expected at a one percent surplus in 2024 due to strong gold exports, is projected to remain in balance until 2026; and official reserves would rise to 3 months of prospective imports (US$7.8 billion) by 2026. 14. Compared to the second review, changes to macroeconomic assumptions are driven by the external sector. Growth projections over the medium term are largely unchanged. 2024 inflation was revised up from 15 to 18 percent, given a slower-than-projected decline until end-September, with a similar increase in the GDP deflator. Nominal GDP in USD terms was revised down noticeably in 2024 despite a higher deflator, given a large nominal exchange rate depreciation. 2024 export growth was raised noticeably, as very large gold exports outweigh the underperforming cocoa sector, but medium-term projections are comparable to the second review. 2024 imports are equally expected to grow at a faster pace in 2024, taking into account preliminary H1 data and larger externally-financed public capital 9 Gross international reserves are defined as the headline official international reserves, excluding foreign assets held by Ghana Petroleum and Stabilization Fund, encumbered and pledged assets, as per the program definition. 7 >>> spending. Average interest rates on external debt declined noticeably as a direct consequence of the debt restructuring, with reduced amounts of external debt and lower rates. 15. The DSA’s baseline scenario assumes a large and frontloaded, yet feasible, fiscal adjustment by the central government and accounts for Cocobod’s net income. The central government’s primary balance on a commitment basis—the key fiscal anchor under the proposed IMF- supported program—would improve by 5.9 percent of GDP between 2022 and 2026, to reach a surplus of 1.5 percent of GDP in 2025, which should be maintained at least until 2028. The authorities have already delivered a significant fiscal adjustment in 2023—achieving a primary balance of -0.3 percent of GDP (some 4 percentage points adjustment compared to 2022), underpinned by permanent non-oil revenue measures of some 1 percent of GDP and efforts to streamline expenditure. 10 In line with the LIC-DSF, projections of central government revenues are augmented with Cocobod’s net income that will be used for debt service as Cocobod is part of the debt coverage (Text Table 3). 16. In 2024 the primary balance (commitment basis) is expected to further improve by 0.8 percentage points, to a surplus of 0.5 percent of GDP, underpinned by new revenue measures. The 2024 Budget was consistent with these objectives, with announced revenue measures aiming to permanently improve the non-oil revenue-to-GDP ratio by 0.9 percent of GDP. They consisted in the streamlining of large VAT exemptions, the strengthening of excise taxes and reforms to reinforce tax compliance and revenue administration. While the VAT on electricity consumption as part of streamlining exemptions was not implemented, alternative measures (primarily strengthening tax administration on foreign income of Ghanian residents) are estimated to have a similar yield. Revenue collections up to August were in line with the expected improvement in the non-oil revenue to GDP ratio. Although 2024 primary expenditure in percent of GDP remains broadly unchanged, it is more supportive towards Ghana’s large development and social protection needs. The ongoing energy sector and statutory fund reforms are expected to create space for critical spending. In particular, the planned reforms to the LEAP program (a structural benchmark under the IMF-supported program) are expected to better support the most vulnerable. End-June data confirm improved revenue and deficit outcomes. 17. Going forward, consolidation efforts over the remaining program period will continue to be based on revenue mobilization, given Ghana’s low tax-to-GDP ratio compared to peers and Ghana’s large development and social needs. The authorities’ objective is to raise the government revenue -to-GDP ratio to over 18 percent by the end of the program, from 15.7 percent in 2022. The 2023 Medium Term Revenue Strategy remains the main anchor of this expected revenue increase, with key expected measures for the coming years focusing on reducing tax expenditures and strengthening tax compliance. Expenditure will need to be streamlined, particularly in the short term, while preserving growth-enhancing public investment, expanding social safety nets, and eliminating extra-budgetary spending and arrears buildup. Additional savings over the medium term will come from a more efficient spending allocation and a reduction in the large subsidies to the energy sector through tariff adjustments and cost reduction measures. A plan to clear the large stock of domestic arrears to suppliers has been prepared as part of 10 Some key measures have been supported by the World Bank’s Sustainable Development Finance Policy (SDFP): in FY24 it supported fiscal sustainability via revenue measures and energy sector reforms, and included a non-concessional borrowing ceiling, consistent with IMF debt limits. 8 >>> the Arrears’ Clearance and Prevention Strategy (a structural benchmark at end -June 2023 under the IMF- supported program), and negotiations of legacy energy sector arrears are progressing. 18. The DSA’s baseline scenario includes the authorities’ comprehensive debt restructuring, which was fully implemented for 95 percent of claims at end-October: • Domestic Debt Exchange Program (DDEP): The government launched the DDEP in early- December 2022, opting for a voluntary approach, seeking to swap outstanding medium- and long-term domestic bonds for lower-coupon and longer maturity bonds. Following the completion of the first stage of DDEP in February, the second phase, finalized in the fall of 2023, included Cocobills, US$- denominated domestic debt, and pension fund holdings of government bonds. The government also restructured the BoG’s holdings of non-marketable debt, while ensuring the central bank’s solvency. • Treatment of bilateral external debt as agreed with the OCC under the G20 Common Framework: The agreed debt treatment provides a full debt service relief over the program period from all bilateral claims committed and disbursed before December 2022. This rescheduled debt service will be capitalized and accrues an additional interest rate (whose level will depend on the initial interest rate of each claim) until repayment in years 16 and 17 after the original due date (for each year of rescheduled debt service). Disbursements of pre-CoD projects made after December 2022 will not be restructured but the authorities and OCC creditors are committed to limit the amount of these disbursements (including commercial) to US$250 million per year from 2024 to 2026 to respect the IMF-supported program parameters. • Eurobond debt restructuring: The Eurobond restructuring was successfully implemented in October 2024. Most bondholders received new bonds maturing in 2029 and 2035, with a nominal haircut of 37 percent and a coupon rate increasing from 5 to 6 percent in 2028. Some bondholders choose to receive longer-term bonds maturing in 2037, with no haircut but paying a coupon rate of 1.5 percent. All bondholders received a downpayment bond maturing in 2026 and a post-default interest bond maturing in 2030. • Restructuring of claims from other commercial creditors: Consistent with the IMF’s Lending into Arrears policy, the authorities are making good faith efforts to reach a debt restructuring agreement with the residual external commercial creditors, on terms that are in line with program parameters and the comparability of treatment principle. The outstanding debt stock to these residual external creditors is US$2.7 billion, which amounts to less than 5 percent of pre-restructuring total public debt. The authorities’ strategy for these creditors is to prepare restructuring offers tailored to the preferences of each type of creditor – some might prefer long-term rescheduling of their claims with no haircut while others are ready to accept principal reduction but prefer to maximize their short-term debt service. Following the completion of the Eurobond restructuring, the authorities have now launched formal negotiations with these creditors. They notably sent official letters to the largest creditors to explain the key parameters of the restructuring. The authorities also intend to start negotiations with other smaller commercial creditors by trying to create a coordination mechanism that will facilitate information sharing and the actual restructuring process. 9 >>> 19. New external borrowing is constrained under the IMF program. New external borrowing under the program is restricted to a PV of US$231.5 million and US$50 million in 2024 and 2025, respectively. World Bank support increased significantly since the 2 nd Review DSA, following large upward revisions in expected project disbursements, from US$1.4 billion to almost US$2 billion over 2023-26. Total DPF support remains unchanged, although DPO2 is now expected to be disbursed in 2025, instead of 2024. 20. Financing assumptions under the baseline scenario are conservative: • On the external side, the DSA scenario assumes that the government will not regain external market access until 2027. External disbursements over the period 2024-26 are thus limited to the World Bank, IMF, AfDB and other bilateral development partners. Between 2023 and 2026, the World Bank11 is assumed to disburse about US$3.5 billion of which about US$1.15 billion for budget support loans and US$369 million for other projects contributing to program financing, and US$2 billion for project support.12 In addition, the AfDB is assumed to disburse US$343 million, of which US$240 million of project loans and grants over the period 2023-26 and US$104 for budget support over the first two years of the program. The scenario assumes disbursements of US$3 billion from the IMF in 2023-26. Other bilateral development partners are expected to contribute by US$853 million from 2024-26, restricted by the limits on pre-COD disbursements. • On the domestic side, the government issued large amount of T-bills in 2023-24 as the bond market was closed in the wake of the restructuring. Demand for T-bills remained strong during this period, in particular from non-bank investors—corporate, pension funds and individuals—which had limited alternative investment options. About 72 percent of 2024 gross financing needs are met by domestic issuances, with similar ratios until the end of the program. Starting in 2025, the baseline assumes, in line with the authorities’ debt management strategy, a resumption of medium and long-term domestic debt issuance. While the effective real interest rate is assumed to remain above 5 percent, nominal interest rates are expected to decline with inflation returning to its target. Overall, net issuance of domestic debt is expected to be slightly negative in the coming years, an indicator that the government is containing its domestic financing needs (Figure 6). Domestic debt service expressed as a share of revenue will remain elevated in comparison to the average in other LICs, but it will be gradually reduced, in line with the domestic debt-to-GDP ratio. 11 Consistent with IDA20’s new financing terms and for the IDA20 period, the DSA assumes that 24 percent of the allocation are concessional Shorter Maturity Loans (SMLs), with a 12-year maturity, 6-year grace period, zero interest or service charge and a grant element of 36 percent. The remaining 76 percent continue to be blend-term credits. 12 Beyond the IDA20 period, IDA financing figures are based on assumptions; actuals will depend on IDA replenishment volumes, country performance, and other operational factors. Delivery of DPFs will be dependent on an agreement with the government on a strong program of policy and institutional reforms, and adequacy of the macroeconomic policy framework. Current practice is to assume the same level of yearly PBA as the IDA20 post-MTR allocations for IDA21 and IDA22 projections. 10 >>> 3 2022 2023 2024 2025 2026 2027 2028 2029-44 Annual Percentage Change Real GDP growth Second Review 3.8 2.9 3.1 4.4 4.9 5.0 5.0 5.0 Current 3.8 2.9 4.0 4.4 4.9 5.0 5.0 5.0 Inflation GDP deflator Second Review 28.2 33.1 17.5 11.1 7.9 7.9 7.6 7.8 Current 28.2 33.1 20.4 10.6 7.8 7.8 7.7 7.8 Nominal GDP (in Billion of USD) Second Review 74.0 76.4 75.3 75.8 81.1 86.8 92.8 165.9 Current 73.9 76.4 72.7 74.5 81.2 87.7 93.8 174.7 Exports, Goods & Services Second Review 7.0 -4.8 3.6 6.8 4.1 5.9 4.3 4.3 Current 7.0 -4.7 10.2 2.6 6.4 5.2 4.1 4.0 Imports, Goods & Services Second Review 4.5 -1.0 2.1 4.5 4.3 4.8 4.4 4.4 Current 4.5 -1.2 5.6 3.7 4.6 4.6 4.3 4.1 In percent of GDP Non-interest Current Account Balance Second Review 0.1 1.0 0.4 -0.1 -0.1 0.1 0.1 0.0 Current 0.1 0.9 -2.0 -1.1 -1.1 -1.0 -0.8 -0.2 Revenue and Grants 1/ Second Review 15.7 16.0 17.1 17.8 18.3 18.1 18.2 18.0 Current 15.7 16.0 17.4 17.6 18.4 18.2 18.2 18.0 Primary Expenditure (cash basis) Second Review 18.9 15.9 17.8 16.8 17.4 17.2 17.2 17.0 Current 18.9 15.9 17.8 16.7 17.6 17.4 17.4 17.0 Primary Deficit (cash basis) 1/ Second Review 3.2 -0.2 0.6 -0.9 -0.9 -0.9 -0.9 -1.0 Current 3.2 -0.2 0.4 -0.8 -0.8 -0.8 -0.8 -1.0 In percent Average real interest rate on domestic debt Second Review -11.6 -22.3 -11.1 -0.2 2.4 1.9 2.9 4.6 Current -11.6 -22.3 -13.2 0.3 2.1 1.8 2.6 4.4 Average real interest rate on external debt Second Review -2.5 -3.1 2.2 2.4 2.1 2.2 2.2 3.3 Current -2.5 -3.1 -0.9 0.2 0.3 0.6 0.8 3.1 Memorandum: Primary Deficit (commitment basis) 4/ Second Review 4.3 0.3 -0.5 -1.5 -1.5 -1.5 -1.5 -1.0 Current 4.3 0.3 -0.5 -1.5 -1.5 -1.5 -1.5 -1.0 Source: Ghanaian Authorities; and IMF staff estimates and projections . 1/ The DSA accounts for Cocobod’s net income used for debt service, and includes AfDB grant budget financing in exceptional financing (instead of grants), explaining the difference with respect to the fiscal figures presented in the 2 nd review staff report tables. 2/ Primary expenditure and deficit are computed on a cash basis. 3/ First Review numbers take average/sums until 2043 only. 4/ Primary deficit on commitment basis of the central government which is a different perimeter from the one of the DSA (see footnote 1/). 11 >>> 2024 2025 PPG external debt Volume of new debt Present value of new debt Volume of new debt Present value of new debt USD million Percent USD million Percent USD million Percent USD million Percent Sources of debt financing 254.5 100 231.5 100 50 100 50 100 Concessional debt, of which 0 0 0 0 0 0 0 0 Multilateral debt 0 0 0 0 0 0 0 0 Bilateral debt 0 0 0 0 0 0 0 0 Non-concessional debt, of which 254.5 100 231.5 100 50 100 50 100 Multilateral debt 84.7 33 73.9 32 20 40 20 40 IFIs debt 0 0 0 0 0 0 0 0 Bilateral debt 148.9 58 133.7 58 30 60 30 60 Commercial debt 21 8 24.0 10 0 0 0 0 Uses of debt financing 254.5 100 231.5 100 50 100 50 100 Infrastructure 84.7 33 73.9 32 50 100 50 100 Budget financing 169.9 67 157.6 68 0 0 0 0 Memorandum items Indicative projections Year 2 50 50 70 70 Year 3 70 70 100 100 Source: IMF staff calculations based on the authorities' reported data . 1/ The Fund-supported program includes a debt ceiling on the PV of newly contracted or guaranteed external debt by the government and SOEs. In line with the TMU definition of the debt ceiling, figures in the table do not include new financing from the IMF, World Bank, AfDB, projected issuances of local currency debt to non-residents, loans and bonds stemming from the restructuring or rescheduling or refinancing of external debt, renewal of an existing suppliers’ credit, rollover of a credit line; (iv) short -term debt including suppliers’ credit and credit lines with a maturity of less than 6 months for public entities mentioned in ¶8 of the TMU. Exact 2025 borrowing plans are not yet known to staff and represent an estimate that respect program parameters. 2/ Some key measures have been supported by the World Bank’s Sustainable Development Finance Policy (SDFP): since FY23 it supported fiscal sustainability via revenue measures, expenditure containment measures and energy sector reforms, and included a non-concessional borrowing ceiling, consistent with IMF debt limits. Source: IMF and World Bank staff projections. 1/ Includes project grants. 2/ Financing commitment unavailable beyond 2026. This includes new budget support for 2024. 12 >>> 21. Staffs’ projections have historically tended to overestimate fiscal adjustment and thus have underestimated overall and external debt growth. Compared to the five-year projection in the 2019 DSA, total public debt exceeded estimates by 30.6 percentage points of GDP between 2019 and 2023 due to higher-than-expected fiscal deficits and other factors. This reflects the unexpected impact of the COVID- 19 pandemic and other exogenous shocks, the financial sector cleanup costs, and a rising interest bill due to deteriorating economic conditions and Ghana’s cred itworthiness. The average five-year gap between the actual and projected overall debt growth remains at 13 percentage points of GDP despite a noticeable 2023 public debt reduction. External debt has also exceeded the 2019-DSA 5-year projections by 14.7 percentage points of GDP due mainly to higher-than-expected external borrowing costs and currency depreciation.13 22. The baseline’s projected primary balance adjustment of 5.9 percent of GDP over three years is feasible. Under the program, projections assume achievement of a primary balance surplus of 1.5 percent of GDP by 2025 on a commitment basis —expected to be maintained over the medium term. Although the consolidation falls within the top quartile for peers’ consolid ation distribution, it remains much lower than the top of the distribution, supporting the consolidation plan’s realism. 14 Moreover, the authorities firmly committed to the fiscal adjustment to restore fiscal sustainability and macroeconomic balances. This has been evidenced by meeting the performance criteria on the targeted primary balance for June 2024 thanks to the adoption of revenue measures such as the VAT rate increase, elimination of discounts at customs, an increase in an existing levy; and the implementation of other expenditure measures (public sector wage bill growth kept well below inflation, reduction of capital expenditures, lower cap on transfers to statutory funds, upfront energy tariff adjustment), accompanied by reforms to strengthen expenditure commitment controls. 23. Downside risks to the baseline are significant. Baseline projections are contingent on successful program implementation and full execution of the external debt restructuring and adequate financing from development partners. Delays in implementing the needed adjustment and reforms, compounded with delays in obtaining the external debt relief, weak interagency coordination, lower agricultural and commodity production and deterioration in global conditions may lead to a further weakening of the macro-financial situation. The domestic debt restructuring presents significant risks to domestic financial sector stability. Continued uncertainty regarding the exchange rate path, large domestic financing needs and still high inflation despite monetary policy tightening represent domestic vulnerabilities. Policy slippages and reversals also represent risks that could be exacerbated by the upcoming 2024 elections. The opposition has communicated broad support to the IMF-supported program, lowering risks of program discontinuation, but risks of overspending in the runup to the elections are high. A recent dry spell affecting agriculture in the northern provinces led to higher inflation and small further increase in 2024 World Bank support. Finally, the need for higher support to the energy sector and 13 Relatively large unexplained residuals are significantly contributing to the accumulation of PPG debt and external debt during 2018-22. They reflect mainly the external private sector debt and the enlargement of the debt coverage to include domestic arrears and implicitly guaranteed SOEs debt (ESLA, GETFund/Daakye, Sinohydro). 14 This is as assessed based on the change in the primary deficit on a commitment basis. Figure 4 shows a much lower adjustment as the DSA is based on the primary balance on a cash basis. 13 >>> Cocobod, and larger-than-expected financial sector support due to the domestic debt exchange program could also adversely affect debt dynamics. However, strong political support for the program constitutes an important mitigating factor. 24. Ghana is highly vulnerable to climate variability and change, which poses significant risks such as flooding and droughts. To address these challenges, the country has developed several climate-related policies and strategies, including the National Climate Change Adaptation Strategy, the Low Carbon Development Strategy, and the National Climate Change Master Plan. The recent Ghana 2022 Country Climate and Development Report (CCDR) provides several recommendations for addressing climate change risks, such as flooding and droughts, and outlines adaptation and mitigation measures. These include an integrated approach to agriculture and environmental management, building sustainable cities and resilient infrastructure, boosting disaster risk preparedness, managing forest resources for climate resilience, transitioning to clean energy, modernizing transport systems, strategizing for climate resilience financing, and implementing adaptive health systems. Key World Bank projects supporting these strategies include the Greater Accra Resilient and Integrated Development Project, which aims to improve flood risk management and solid waste management in the Odaw River Basin, and the Greater Accra Urban Resilience and Integrated Development Project, which proposes improvements to drainage systems and flood water management. 25. Ghana’s debt carrying capacity is assessed as “ medium”, unchanged from the last DSA. Although higher than its level in the 2021 DSA, the Composite Indicator (CI) score of 2.74 remains between the cut-off values for weak and strong debt-carrying capacity, 2.69 and 3.05, respectively, suggesting a medium debt carrying capacity. The CI is the weighted average of the 10-year average of the World Bank’s Country Policy and Institutional Assessment (CPIA) score and macro-economic variables from the April 2024 WEO vintage. 26. Stress tests applied to public and external debt show that the primary balance, commodity prices, exports and contingent liabilities are the most relevant for debt dynamics. A set of standard shock scenarios affecting GDP growth, the primary balance, exports and FDI are calibrated at 1 standard deviation in 2025 from their respective historical averages, while the exchange rate is stressed with a one- time 30 percent depreciation in 2025. A combined shock including all the above at half magnitude is also applied. Tailored stress tests are carried out on commodity prices—with interactions with other macroeconomic variables—since commodities represent over 80 percent of exports; on contingent liabilities stock and on market access due to the large stock of outstanding Eurobonds. The tailored commodity price test simulates a one standard deviation drop in both fuel and non-fuel commodity export prices, while the market financing shock simulates a 400bps increase in the cost of borrowing for 3 years, a shortening of average maturities on external debt by 2 years and a 15 percent exchange rate 14 >>> depreciation. The contingent liability stress test suggests a one-off increase in the public debt to GDP ratio, with the shock components set at their default values. 15 Debt Carrying Capacity Medium APPLICABLE APPLICABLE Classification based on Classification based on Classification based on the Final current vintage the previous vintage two previous vintage EXTERNAL debt burden thresholds TOTAL public debt benchmark PV of total public debt in Medium Medium Medium Medium PV of debt in % of percent of GDP 55 2.740 2.72 2.75 Exports 180 GDP 40 - Debt service in % of Exports 15 Revenue 18 Calculation of the CI Index Components Coefficients (A) 10-year average CI Score components Contribution of New framework values (B) (A*B) = (C) components CPIA 0.385 3.446 1.33 48% Cut-off values Real growth rate (in percent) 2.719 3.954 0.11 4% Weak CI < 2.69 Import coverage of reserves (in percent) 4.052 27.069 1.10 40% Medium 2.69 ≤ CI ≤ 3.05 Import coverage of reserves^2 (in percent) -3.990 7.327 -0.29 -11% Strong CI > 3.05 Remittances (in percent) 2.022 5.341 0.11 4% World economic growth (in percent) 13.520 2.909 0.39 14% CI Score 2.740 100% CI rating Medium Source: CI score calculations based on LIC DSF 27. Under the baseline, all external debt burden indicators fall durably below or to their respective thresholds by 2028 (Figure 1). The debt-service to revenue ratio remains at or slightly below 18 percent until 2035, highlighting limited room for slippages. The other three external debt indicators (PV of PPG external debt-to-GDP, debt service-to-exports ratio, and PV of external debt-to-exports ratio) remain below their respective thresholds in the baseline. A combination of shocks leads to a breach in the PV of external debt-to-GDP ratio over the medium term, while a shock to exports has the largest negative impact on the PV of debt-to-export, debt service-to-export, and debt service-to-revenue ratios, leading to breaches in their respective thresholds for the latter two indicators. The PV of external debt-to-exports ratio does not breach its 180 percent threshold under any shock scenario. 28. Under the baseline, the PV of total PPG debt-to-GDP is expected to fall durably below its 55 percent benchmark by 2028 (Figure 2). A contingent liability shock has the most severe impact on the PV of debt-to-GDP ratio, leading to a breach of 55 percent over the entire forecast horizon, highlighting the importance of fiscal restraint going forward. A commodity price shock impacts the debt service-to-revenue and the PV of debt-to-revenue ratio most strongly. 15 The contingent liability shock has 2 components: (i) a minimum starting value of 5 percent of GDP; and (ii) a tailored component which encompasses contingent liabilities stemming from the financial market (5 percent of GDP), PPPs (2.4 percent of GDP) and other SOEs debt that is not captured by the debt coverage (2 percent of GDP). 15 >>> 29. Despite the loss of market access, the market financing risks are assessed as “moderate” (Figure 5). The maximum gross financing need over the 3-year baseline projection horizon lies at 11 percent and does no longer breach the 14 percent of GDP benchmark, signaling a decline in financing pressures over the medium term following a successful debt restructuring process and continued fiscal discipline. Gross financing needs are projected to gradually decline to below 10 percent by 2032. Eurobond spreads have declined drastically in October, from around 2,000 to below 700 within a few days, but they remain above the 570-bps benchmark, with continued lack of market access. 30. Ghana is at high risk of distress due to near-term breaches of the DSA thresholds, but is expected to reach moderate risk of debt distress in the medium term as all DSA sustainability targets will be met by 2028; and debt is assessed to be sustainable on a forward-looking basis as the external debt restructuring is expected to be completed in line with program parameters. Taking into account the authorities’ continuing good faith negotiations with residual external private creditors on a treatment in line with program parameters, Ghana’s debt is assessed as sustainable on a forward -looking basis. In the baseline, all debt burden indicators fall below or to their critical thresholds by 2028. The residual arrears with other commercial non-bonded creditors, given their limited size (less than 5 percent), can be considered as treated on comparable terms and deemed away for the purpose of the risk rating (in line with LIC DSF Guidance Note), as the overall restructuring strategy has been assessed as consistent with program parameters. Good faith efforts are continuing. 31. The baseline assumes strong program ownership and the authorities’ full commitment to implement the Fund-supported program to restore debt sustainability and bring the debt risk rating to “moderate” in the medium term. This includes in particular reducing the PV of total debt -to-GDP and external debt service-to-revenue ratios to 55 and 18 percent, respectively, by 2028, which entails a revenue-based fiscal consolidation with higher spending efficiency and stronger social safety nets, as well as structural reforms to support greater exchange rate flexibility, a more diversified economy and stronger growth. 32. Enhancing debt data and transparency are essential to better identify PPG debt and contingent liabilities and allow for a more accurate assessment of debt vulnerabilities. Materialization of contingent liabilities, off-budget operations, and domestic arrears have been drivers of debt accumulation in the past (along with rapid cedi depreciation, underlining the need to restore macroeconomic stability). Furthermore, SOEs represent a potential source of government obligations, either in the form of undisclosed debt or contingent liabilities.16 A more comprehensive coverage of SOEs debt and guarantees—particularly those that engage in quasi-fiscal activities—should allow for a more accurate assessment of fiscal risks and enhance debt coverage. 16 As part of its Sustainable Development Finance Policy (SDFP), the World Bank supported the publication of the 2020 State Ownership Report in 2022, to provide a better picture on large SOEs’ financial liabilities. 16 >>> 33. The authorities generally shared staff’s assessment of debt sustainability and renewed their commitment to continue with their strong implementation of the IMF-supported program and continue the restructuring of their external debt to restore debt sustainability. The authorities acknowledged the importance of a successful implementation of the reform agenda underpinned by the IMF-supported program to restore economic stability—a critical pillar for restoring debt sustainability. 17 >>> PV of debt-to GDP ratio PV of debt-to-exports ratio 50 200 45 180 40 160 35 140 30 120 25 100 20 80 15 60 10 40 5 Most extreme shock: Combination 20 Most extreme shock: Exports 0 0 2024 2026 2028 2030 2032 2034 2024 2026 2028 2030 2032 2034 Debt service-to-exports ratio Debt service-to-revenue ratio 25 35 30 20 25 15 20 15 10 10 5 5 Most extreme shock: Exports Most extreme shock: Exports 0 0 2024 2026 2028 2030 2032 2034 2024 2026 2028 2030 2032 2034 Baseline Historical scenario Most extreme shock 1/ Threshold Borrowing assumptions on additional financing needs resulting from the stress Customization of Default Settings tests* Size Interactions Default User defined Shares of marginal debt Standardized Tests Yes No External PPG MLT debt 100% Tailored Stress Terms of marginal debt Combined CL No Avg. nominal interest rate on new borrowing in USD 5.7% 9.0% Natural disaster n.a. n.a. USD Discount rate 5.0% 5.0% Commodity price No No Avg. maturity (incl. grace period) 17 17 Market financing No No Avg. grace period 7 7 Note: "Yes" indicates any change to the size or * Note: All the additional financing needs generated by the shocks under the stress tests interactions of the default settings for the stress tests. are assumed to be covered by PPG external MLT debt in the external DSA. Default terms "n.a." indicates that the stress test does not apply. of marginal debt are based on baseline 10-year projections. Sources: Country authorities; and staff estimates and projections. 1/ The most extreme stress test is the test that yields the highest ratio in or before 2034. The stress test with a one-off breach is also presented (if any), while the one-off breach is deemed away for mechanical signals. When a stress test with a one-off breach happens to be the most exterme shock even after disregarding the one-off breach, only that stress test (with a one-off breach) would be presented. 2/ The magnitude of shocks used for the commodity price shock stress test are based on the commodity prices outlook prepared by the IMF research department. Note: Interest rate on additional borrowing resulting from the stress test is estimated at 9 percent (higher than the default rate of 4.9 percent) to reflect deterioration in Ghana’s creditworthiness and loss of market access . 18 >>> PV of Debt-to-GDP Ratio 80 70 60 50 40 30 20 Most extreme shock: Combined contingent liabilities 10 0 2024 2026 2028 2030 2032 2034 PV of Debt-to-Revenue Ratio Debt Service-to-Revenue Ratio 500 120 450 100 400 350 80 300 250 60 200 40 150 100 20 Most extreme shock: Commodity price Most extreme shock: Commodity price 50 0 0 2024 2026 2028 2030 2032 2034 2024 2026 2028 2030 2032 2034 Baseline Most extreme shock 1/ TOTAL public debt benchmark Historical scenario Borrowing assumptions on additional financing needs resulting from the Default User defined stress tests* Shares of marginal debt External PPG medium and long-term 28% 28% Domestic medium and long-term 48% 48% Domestic short-term 24% 24% Terms of marginal debt External MLT debt Avg. nominal interest rate on new borrowing in USD 5.7% 9% Avg. maturity (incl. grace period) 17 17 Avg. grace period 7 7 Domestic MLT debt Avg. real interest rate on new borrowing 4.0% 5.0% Avg. maturity (incl. grace period) 6 6 Avg. grace period 0 0 Domestic short-term debt Avg. real interest rate 4.4% 4.4% * Note: The public DSA allows for domestic financing to cover the additional financing needs generated by the shocks under the stress tests in the public DSA. Default terms of marginal debt are based on baseline 10-year projections. Sources: Country authorities; and staff estimates and projections. Sources: Country authorities; and staff estimates and projections 1/ The most extreme stress test is the test that yields the highest ratio in or before 2034. The stress test with a 1/ The most extreme one-off stress breach the presented test is also test that (if any), while yields the the one-off highest breach ratio is deemed in or beforeaway 2034. for The mechanical stress signals. Whena one-off breach is also test with thetest a stress presented (if any), while one-off breach with a breach one-off happens is deemed to be away themechanical for most extermesignals. shock even after disregarding When a stress testthe one-off with a one-off breach happens to breach, only that stress test (with a one-off breach) would be presented. be the most extreme shock even after disregarding the one-off breach, only that stress test (with a one-off breach) would be presented. Note: Interest rate on additional borrowing resulting from the stress test is estimated at 9 percent (higher than the default rate of 4.9 percent) to reflect deterioration in Ghana’s creditworthiness and loss of market access . 19 >>> External debt Gross Nominal PPG External Debt Debt-creating flows Unexpected Changes in Debt 1/ (in percent of GDP; DSA vintages) (percent of GDP) (past 5 years, percent of GDP) Current DSA 40 80 Residual 20 Program Approval DSA proj . 70 DSA-2019 Interquartile Price and 20 15 range (25-75) 60 exchange rate 50 Real GDP 10 growth 0 Change in PPG 40 debt 3/ 5 Nominal 30 interest rate -20 20 0 Median Current 10 account + FDI -5 -40 0 Change in 5-year 5-year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 PPG debt 3/ Contribution of Distribution across LICs 2/ historical projected -1 0 unexpected change change Public debt Gross Nominal Public Debt Debt-creating flows Unexpected Changes in Debt 1/ (in percent of GDP; DSA vintages) (percent of GDP) (past 5 years, percent of GDP) Residual 50 Current DSA 60 Program Approval DSA proj. DSA-2019 Other debt Interquartile 100 creating flows 50 range (25-75) 90 Real 40 80 Exchange 70 rate 30 depreciation Real GDP 0 60 growth 20 Change in debt 50 40 Real interest 10 rate 30 0 20 Primary deficit 10 -10 -50 Median 0 Change in debt 5-year 5-year -20 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Distribution across LICs 2/ historical projected Contribution of change change -30 unexpected 1/ Difference betw een anticipated and actual contributions on debt ratios. 2/ Distribution across LICs for w hich LIC DSAs w ere produced. 3/ Given the relatively low private external debt for average low -income countries, a ppt change in PPG external debt should be largely explained by the drivers of the external debt dynamics equation. Sources: Country authorities; and staff estimates and projections Note: Interest rate on additional borrowing resulting from the stress test is estimated at 9 percent (higher than the default rate of 4.9 percent) to reflect deterioration in Ghana’s creditworthiness and loss of market access. 20 >>> 3-Year Adjustment in Primary Balance Fiscal Adjustment and Possible Growth Paths 1/ (Percentage points of GDP) Distribution 1/ 7 2 14 Projected 3-yr 6 12 adjustment 3-year PB adjustment greater In percentage points of GDP 10 than 2.5 percentage points of 5 1 GDP in approx. top quartile In percent 4 8 6 3 0 4 2 2 1 0 0 -1 more 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 -4.5 -4.0 -3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 2018 2019 2020 2021 2022 2023 2024 2025 Baseline Multiplier = 0.2 Multiplier = 0.4 Multiplier = 0.6 Multiplier = 0.8 1/ Bars refer to annual projected fiscal adjustment (right-hand side scale) and lines show 1/ Data cover Fund-supported programs for LICs (excluding emergency financing) approved since possible real GDP growth paths under different fiscal multipliers (left-hand side scale). 1990. The size of 3-year adjustment from program inception is found on the horizontal axis; the percent of sample is found on the vertical axis. Public and Private Investment Rates Contribution to Real GDP growth (percent of GDP) (percent, 5-year average) 24 5 22 5 20 4 18 4 16 14 3 12 3 10 2 8 2 6 1 4 2 1 0 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Historical Projected (Prev. DSA) Projected (Curr. DSA) Gov. Invest. - Prog. Approval DSA Gov. Invest. - Curr. DSA Contribution of other factors Priv. Invest. - Prog. Approval DSA Priv. Invest. - Curr. DSA Contribution of government capital Sources: Country authorities; and staff estimates and projections 21 >>> GFN 1/ EMBI 2/ Benchmarks 14 570 Values 11 700 Breach of benchmark No Yes Potential heightened liquidity needs Moderate 1/ Maximum gross financing needs (GFN) over 3-year baseline projection horizon. 2/ EMBI spreads correspond to the latest available data. PV of debt-to GDP ratio PV of debt-to-exports ratio 45 200 40 180 35 160 30 140 25 120 20 100 80 15 60 10 40 5 20 0 0 2024 2026 2028 2030 2032 2034 2024 2026 2028 2030 2032 2034 Debt service-to-exports ratio Debt service-to-revenue ratio 16 25 14 20 12 10 15 8 10 6 4 5 2 0 0 2024 2026 2028 2030 2032 2034 2024 2026 2028 2030 2032 2034 Baseline Market financing Threshold Sources: Country authorities; and staff estimates and projections. Note: Both the baseline and market financing shock scenarios display very similar paths for PV of debt-to-exports, debt service-to-exports and debt service-to-revenue ratios due to the low level of new envisaged commercial borrowing in the 3 years from the second year of the projection (2024-26). 22 >>> 23 >>> Actual Projections Average 8/ Historical Projections 2023 2024 2025 2026 2027 2028 2029 2034 2044 External debt (nominal) 1/ 50.0 50.7 48.6 45.3 43.0 41.0 39.1 32.8 24.8 43.8 40.2 Definition of external/domestic debt Residency-based of which: public and publicly guaranteed (PPG) 44.4 44.5 42.2 39.1 37.0 35.1 33.4 27.6 20.4 39.3 34.4 Is there a material difference between the Yes two criteria? Change in external debt 1.6 0.7 -2.1 -3.3 -2.3 -2.0 -1.9 -1.0 -0.5 Identified net debt-creating flows -2.4 -5.3 -4.8 -5.0 -4.8 -4.6 -4.3 -1.0 -1.2 -2.4 -3.5 Non-interest current account deficit 0.9 -2.0 -1.1 -1.1 -1.0 -0.8 -0.7 0.0 -0.1 1.3 -0.7 Deficit in balance of goods and services 2.2 0.9 1.3 0.6 0.4 0.4 0.3 0.1 0.9 3.4 0.4 Exports 31.9 36.9 37.0 36.1 35.1 34.2 33.4 29.3 21.7 Debt Accumulation Imports 34.1 37.8 38.3 36.7 35.5 34.6 33.8 29.4 22.5 2.0 35 Net current transfers (negative = inflow) -5.4 -6.8 -6.7 -6.2 -5.8 -5.6 -5.5 -4.9 -4.1 -4.5 -5.6 of which: official 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.8 30 Other current account flows (negative = net inflow) 4.2 4.0 4.3 4.5 4.5 4.4 4.5 4.8 3.1 2.4 4.6 1.6 Net FDI (negative = inflow) -1.7 -2.2 -2.6 -2.8 -2.9 -3.0 -3.0 -1.0 -1.2 -4.1 -2.2 1.4 25 Endogenous debt dynamics 2/ -1.7 -1.1 -1.1 -1.1 -0.9 -0.8 -0.6 0.0 0.1 Contribution from nominal interest rate 0.4 0.9 1.1 1.1 1.2 1.2 1.3 1.5 1.3 1.2 20 Contribution from real GDP growth -1.4 -2.1 -2.2 -2.2 -2.1 -2.0 -1.9 -1.6 -1.2 1.0 Contribution from price and exchange rate changes -0.7 … … … … … … … … 15 Residual 3/ 4.0 6.0 2.6 1.6 2.5 2.6 2.5 0.0 0.7 4.5 1.9 0.8 of which: exceptional financing 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 10 0.4 Sustainability indicators 5 PV of PPG external debt-to-GDP ratio 29.6 32.9 33.8 31.7 30.2 29.0 27.8 24.4 19.0 0.2 PV of PPG external debt-to-exports ratio 92.7 89.1 91.3 87.8 86.0 84.8 83.1 83.2 87.7 0.0 0 PPG debt service-to-exports ratio 1.7 4.3 5.9 8.6 9.4 9.4 9.6 10.9 10.3 2024 2026 2028 2030 2032 2034 PPG debt service-to-revenue ratio 3.5 9.2 12.5 17.1 18.3 18.0 18.0 17.9 12.6 Gross external financing need (Million of U.S. dollars) 867.4 -748.2 79.3 701.2 966.2 1131.1 1294.1 6050.7 2611.6 Debt Accumulation Grant-equivalent financing (% of GDP) Key macroeconomic assumptions Grant element of new borrowing (% right scale) Real GDP growth (in percent) 2.9 4.0 4.4 4.9 5.0 5.0 5.0 5.0 5.0 4.2 4.8 GDP deflator in US dollar terms (change in percent) 0.4 -8.4 -1.9 3.9 2.9 1.8 1.8 1.8 1.9 -1.7 0.9 Effective interest rate (percent) 4/ 0.9 1.8 2.2 2.5 2.8 3.0 3.4 4.9 5.4 5.4 3.3 External debt (nominal) 1/ Growth of exports of G&S (US dollar terms, in percent) -4.7 10.2 2.6 6.4 5.2 4.1 4.4 3.4 4.3 4.6 4.9 of which: Private Growth of imports of G&S (US dollar terms, in percent) -1.2 5.6 3.7 4.5 4.6 4.3 4.1 3.7 4.8 1.8 4.3 60 Grant element of new public sector borrowing (in percent) ... 31.8 28.2 18.4 10.0 10.5 10.6 4.7 3.8 ... 12.5 Government revenues (excluding grants, in percent of GDP) 15.8 17.1 17.3 18.1 18.0 17.9 17.8 17.8 17.8 14.0 17.8 50 Aid flows (in Million of US dollars) 5/ 219.6 1118.5 1248.4 887.4 860.3 900.5 943.4 759.4 1052.6 Grant-equivalent financing (in percent of GDP) 6/ ... 1.4 1.1 0.7 0.5 0.5 0.5 0.4 0.3 ... 0.6 40 Grant-equivalent financing (in percent of external financing) 6/ ... 37.2 33.0 24.5 16.2 16.9 17.3 11.2 13.6 ... 18.7 Nominal GDP (Million of US dollars) 76,363 72,734 74,511 81,208 87,747 93,830 100,252 ##### 276,030 Nominal dollar GDP growth 3.3 -4.8 2.4 9.0 8.1 6.9 6.8 6.9 7.0 2.4 5.8 30 Memorandum items: 20 PV of external debt 7/ 35.2 39.1 40.1 37.8 36.2 34.9 33.6 29.6 23.3 In percent of exports 110.4 106.0 108.5 104.8 103.0 101.9 100.3 101.1 107.8 10 Total external debt service-to-exports ratio 6.0 8.4 10.3 13.2 14.2 14.5 15.0 17.9 10.3 PV of PPG external debt (in Million of US dollars) 22582.8 23930.5 25152.7 25731.3 26516.8 27225.2 27869.2 34297.1 52431.8 0 (PVt-PVt-1)/GDPt-1 (in percent) 1.8 1.7 0.8 1.0 0.8 0.7 1.1 1.0 2024 2026 2028 2030 2032 2034 Non-interest current account deficit that stabilizes debt ratio -0.7 -2.7 1.0 2.2 1.3 1.2 1.1 1.0 0.4 Sources: Country authorities; and staff estimates and projections. 0 1/ Includes both public and private sector external debt. 2/ Derived as [r - g - ρ(1+g) + Ɛα (1+r)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, ρ = growth rate of GDP deflator in U.S. dollar terms, Ɛ=nominal appreciation of the local currency, and α= share of local currency-denominated external debt in total external debt. 3/ Includes exceptional financing (i.e., changes in arrears and debt relief); changes in gross foreign assets; and valuation adjustments. For projections also includes contribution from price and exchange rate changes. 4/ Current-year interest payments divided by previous period debt stock. 5/ Defined as grants, concessional loans, and debt relief. 6/ Grant-equivalent financing includes grants provided directly to the government and through new borrowing (difference between the face value and the PV of new debt). 7/ Assumes that PV of private sector debt is equivalent to its face value. 8/ Historical averages are generally derived over the past 10 years, subject to data availability, whereas projections averages are over the first year of projection and the next 10 years. 24 >>> Actual Projections Average 6/ 2023 2024 2025 2026 2027 2028 2029 2034 2044 Historical Projections Public sector debt 1/ 83.1 78.0 72.2 67.2 63.0 59.4 56.8 47.2 35.0 67.8 59.1 Definition of external/domestic Residency- of which: external debt 44.4 44.5 42.2 39.1 37.0 35.1 33.4 27.6 20.4 39.3 34.4 debt based of which: local-currency denominated Change in public sector debt -9.6 -5.1 -5.8 -5.1 -4.2 -3.6 -2.6 -1.6 -1.2 Is there a material difference Identified debt-creating flows -11.1 -7.0 -3.7 -3.6 -3.3 -3.0 -2.9 -1.8 -1.2 1.6 -3.1 Yes between the two criteria? Primary deficit -0.2 0.4 -0.8 -0.8 -0.8 -0.8 -1.3 -1.0 -1.0 2.2 -0.8 Revenue and grants 16.1 17.4 17.6 18.4 18.2 18.2 18.0 18.0 18.0 14.5 18.0 of which: grants 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Public sector debt 1/ Primary (noninterest) expenditure 15.9 17.8 16.7 17.6 17.4 17.4 16.8 17.0 17.0 16.6 17.2 Automatic debt dynamics -10.8 -8.0 -3.1 -2.8 -2.5 -2.1 -1.6 -0.8 -0.2 of which: local-currency denominated Contribution from interest rate/growth differential -14.2 -8.0 -3.1 -2.8 -2.5 -2.1 -1.6 -0.8 -0.2 of which: foreign-currency denominated of which: contribution from average real interest rate -11.6 -4.9 0.1 0.6 0.6 0.9 1.2 1.5 1.5 of which: contribution from real GDP growth -2.7 -3.2 -3.3 -3.4 -3.2 -3.0 -2.8 -2.3 -1.7 90 Contribution from real exchange rate depreciation 3.4 ... ... ... ... ... ... ... ... 80 Other identified debt-creating flows 0.0 0.7 0.3 0.0 0.0 0.0 0.0 0.0 0.0 -0.1 0.1 70 Privatization receipts (negative) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 60 Recognition of contingent liabilities (e.g., bank recapitalization) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 50 Debt relief (HIPC and other) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 40 Other debt creating or reducing flow (please specify) 0.0 0.7 0.3 0.0 0.0 0.0 0.0 0.0 0.0 30 Residual 1.5 1.9 -2.1 -1.5 -0.9 -0.6 0.3 0.2 0.0 2.5 -0.2 20 10 Sustainability indicators 0 PV of public debt-to-GDP ratio 2/ 70.6 70.0 64.7 60.5 57.0 54.1 52.1 44.7 34.1 2024 2026 2028 2030 2032 2034 PV of public debt-to-revenue and grants ratio 438.2 402.3 368.9 329.2 313.1 298.0 288.6 247.5 188.9 Debt service-to-revenue and grants ratio 3/ 64.0 59.2 71.7 71.3 71.0 72.4 62.6 58.5 44.5 Gross financing need 4/ 10.1 11.5 10.9 11.3 11.2 11.4 10.0 9.5 7.0 of which: held by residents of which: held by non-residents Key macroeconomic and fiscal assumptions 90 Real GDP growth (in percent) 2.9 4.0 4.4 4.9 5.0 5.0 5.0 5.0 5.0 4.2 4.8 80 Average nominal interest rate on external debt (in percent) 0.4 1.5 2.0 2.1 2.4 2.7 3.0 4.5 6.8 5.7 3.0 70 Average real interest rate on domestic debt (in percent) -22.3 -13.2 0.3 2.1 1.8 2.6 3.8 4.5 3.7 1.5 1.7 60 Real exchange rate depreciation (in percent, + indicates depreciation) 7.9 … ... ... ... ... ... ... ... 5.0 ... 50 Inflation rate (GDP deflator, in percent) 33.1 20.4 10.6 7.8 7.8 7.7 7.6 7.8 7.9 16.5 9.2 40 Growth of real primary spending (deflated by GDP deflator, in percent) -13.6 16.4 -1.8 10.1 4.3 4.4 1.6 5.0 5.0 5.0 5.6 30 Primary deficit that stabilizes the debt-to-GDP ratio 5/ 9.3 5.5 5.0 4.3 3.4 2.8 1.3 0.6 0.2 0.3 2.4 20 PV of contingent liabilities (not included in public sector debt) 3.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 10 0 2024 2026 2028 2030 2032 2034 Sources: Country authorities; and staff estimates and projections. 1/ Coverage of debt: The central government, central bank, government-guaranteed debt, non-guaranteed SOE debt . Definition of external debt is Residency-based. 2/ The underlying PV of external debt-to-GDP ratio under the public DSA differs from the external DSA with the size of differences depending on exchange rates projections. 3/ Debt service is defined as the sum of interest and amortization of medium and long-term, and short-term debt. 4/ Gross financing need is defined as the primary deficit plus debt service plus the stock of short-term debt at the end of the last period and other debt creating/reducing flows. 5/ Defined as a primary deficit minus a change in the public debt-to-GDP ratio ((-): a primary surplus), which would stabilizes the debt ratio only in the year in question. 6/ Historical averages are generally derived over the past 10 years, subject to data availability, whereas projections averages are over the first year of projection and the next 10 years. 25 >>> Projections 1/ 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 PV of debt-to GDP ratio Baseline 32.9 33.8 31.7 30.2 29.0 27.8 26.5 26.0 25.4 24.9 24.4 A. Alternative Scenarios A1. Key variables at their historical averages in 2024-2034 2/ 32.9 34.7 35.8 37.2 38.5 39.8 40.4 40.6 40.5 40.1 39.2 0 #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A B. Bound Tests B1. Real GDP growth 32.9 35.1 34.6 33.0 31.7 30.3 29.0 28.4 27.7 27.2 26.6 B2. Primary balance 32.9 35.6 37.5 37.2 36.9 36.3 35.6 35.6 35.6 35.4 35.1 B3. Exports 32.9 38.0 42.7 41.2 40.2 39.1 38.0 37.6 37.2 36.7 35.7 B4. Other flows 3/ 32.9 38.8 41.3 39.9 38.9 37.8 36.7 36.4 35.9 35.4 34.4 B5. Depreciation 32.9 42.6 38.2 36.4 34.8 33.2 31.6 30.8 30.1 29.4 28.8 B6. Combination of B1-B5 32.9 40.6 42.9 41.5 40.4 39.3 38.1 37.7 37.3 36.6 35.7 C. Tailored Tests C1. Combined contingent liabilities 32.9 36.6 35.7 35.2 34.8 34.2 33.5 33.5 33.4 33.3 33.0 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 32.9 34.2 33.0 31.8 30.9 29.7 28.5 27.9 27.3 26.8 26.2 C4. Market Financing 32.9 37.8 35.5 33.9 32.6 31.3 29.9 29.3 28.6 28.0 27.2 Threshold 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 PV of debt-to-exports ratio Baseline 89.1 91.3 87.8 86.0 84.8 83.1 81.3 80.9 81.2 82.4 83.2 A. Alternative Scenarios A1. Key variables at their historical averages in 2024-2034 2/ 89.1 93.7 99.1 105.8 112.5 118.9 123.6 126.6 129.5 132.6 134.0 0 0 1 2 3 4 5 6 7 7 8 9 B. Bound Tests B1. Real GDP growth 89.1 91.3 87.8 86.0 84.8 83.1 81.3 80.9 81.2 82.4 83.2 B2. Primary balance 89.1 96.3 104.0 105.7 107.7 108.5 109.1 111.0 113.7 117.2 119.9 B3. Exports 89.1 111.1 139.3 138.3 138.4 137.9 137.2 138.1 140.1 143.0 143.9 B4. Other flows 3/ 89.1 105.0 114.4 113.5 113.6 113.1 112.5 113.2 114.9 116.9 117.7 B5. Depreciation 89.1 90.7 83.3 81.3 79.9 78.0 76.0 75.5 75.5 76.4 77.3 B6. Combination of B1-B5 89.1 111.5 111.7 121.8 121.8 121.3 120.5 121.3 123.0 125.0 125.8 C. Tailored Tests C1. Combined contingent liabilities 89.1 99.1 99.0 100.0 101.7 102.3 102.7 104.4 106.7 110.0 112.9 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 89.1 91.6 90.6 90.0 89.7 88.6 87.1 86.8 87.1 88.4 89.3 C4. Market Financing 89.1 91.3 87.8 86.1 85.1 83.7 81.9 81.6 81.7 82.6 83.1 Threshold 180.0 180.0 180.0 180.0 180.0 180.0 180.0 180.0 180.0 180.0 180.0 Debt service-to-exports ratio Baseline 4.3 5.9 8.6 9.4 9.4 9.6 9.8 10.0 10.3 10.6 10.9 A. Alternative Scenarios A1. Key variables at their historical averages in 2024-2034 2/ 4.3 5.9 9.4 11.0 11.9 12.9 14.1 15.2 16.0 17.1 18.4 0 0 0 0 0 0 0 0 1 1 1 1 B. Bound Tests B1. Real GDP growth 4.3 5.9 8.6 9.4 9.4 9.6 9.8 10.0 10.3 10.6 10.9 B2. Primary balance 4.3 5.9 9.2 10.8 11.2 11.7 12.1 12.5 12.9 13.8 14.8 B3. Exports 4.3 6.5 11.4 14.2 14.4 14.7 15.1 15.4 15.9 17.2 19.3 B4. Other flows 3/ 4.3 5.9 9.8 11.6 11.8 12.1 12.4 12.7 13.0 14.4 15.8 B5. Depreciation 4.3 5.9 8.6 9.0 9.0 9.2 9.4 9.5 9.8 10.0 10.1 B6. Combination of B1-B5 4.3 6.1 10.8 12.6 12.8 13.1 13.4 13.7 14.1 15.7 16.9 C. Tailored Tests C1. Combined contingent liabilities 4.3 5.9 9.3 10.3 10.6 11.0 11.5 11.8 12.3 12.8 13.3 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 4.3 5.9 8.7 9.8 9.9 10.2 10.5 10.6 10.9 11.3 11.7 C4. Market Financing 4.3 5.9 8.6 9.4 9.9 10.3 10.5 12.0 11.8 10.3 10.7 Threshold 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 Debt service-to-revenue ratio Baseline 9.2 12.5 17.1 18.3 18.0 18.0 18.0 18.0 18.0 17.9 17.9 A. Alternative Scenarios A1. Key variables at their historical averages in 2024-2034 2/ 9.2 12.5 18.7 21.5 22.7 24.2 25.9 27.3 28.1 29.1 30.2 0 0 0 0 0 1 1 1 1 1 1 1 B. Bound Tests B1. Real GDP growth 9.2 13.0 18.7 19.9 19.6 19.6 19.6 19.6 19.6 19.6 19.5 B2. Primary balance 9.2 12.5 18.4 21.2 21.4 21.9 22.2 22.4 22.7 23.5 24.4 B3. Exports 9.2 12.8 19.2 23.5 23.2 23.4 23.5 23.6 23.6 24.8 26.9 B4. Other flows 3/ 9.2 12.5 19.4 22.7 22.5 22.6 22.7 22.8 22.9 24.5 26.0 B5. Depreciation 9.2 15.9 21.7 22.3 21.9 21.9 21.9 21.9 21.8 21.6 21.0 B6. Combination of B1-B5 9.2 12.9 20.9 23.9 23.6 23.8 23.8 23.9 24.0 25.8 26.8 C. Tailored Tests C1. Combined contingent liabilities 9.2 12.5 18.4 20.1 20.3 20.7 21.0 21.3 21.5 21.7 21.9 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 9.2 14.1 19.5 21.3 20.6 20.2 19.7 19.2 19.2 19.2 19.3 C4. Market Financing 9.2 12.5 17.1 18.4 18.9 19.4 19.3 21.6 20.7 17.6 17.5 Threshold 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 Sources: Country authorities; and staff estimates and projections. 1/ A bold value indicates a breach of the threshold. 2/ Variables include real GDP growth, GDP deflator (in U.S. dollar terms), non-interest current account in percent of GDP, and non-debt creating flows. 3/ Includes official and private transfers and FDI. 26 >>> Projections 1/ 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 PV of Debt-to-GDP Ratio Baseline 70.0 64.7 60.5 57.0 54.1 52.1 50.3 48.7 47.2 45.9 44.7 A. Alternative Scenarios A1. Key variables at their historical averages in 2024-2034 2/ 70.0 64.9 59.9 56.0 53.1 51.3 49.9 48.6 47.6 46.6 45.7 0 #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A B. Bound Tests B1. Real GDP growth 70.0 68.3 69.0 67.2 66.0 65.8 65.8 66.1 66.5 67.0 67.5 B2. Primary balance 70.0 70.8 74.3 71.2 68.7 67.2 65.9 64.7 63.7 62.7 61.8 B3. Exports 70.0 68.3 70.5 67.2 64.5 62.6 61.0 59.5 58.3 57.0 55.3 B4. Other flows 3/ 70.0 70.0 70.3 67.0 64.3 62.4 60.8 59.3 58.1 56.7 55.0 B5. Depreciation 70.0 70.5 65.0 60.5 56.8 54.0 51.6 49.4 47.4 45.5 43.8 B6. Combination of B1-B5 70.0 67.7 69.6 66.8 64.6 63.3 62.1 61.1 60.2 59.3 58.5 C. Tailored Tests C1. Combined contingent liabilities 70.0 74.5 70.6 67.5 65.0 63.4 62.0 60.8 59.8 58.8 57.9 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 70.0 68.4 67.2 67.1 67.2 67.8 68.3 68.7 69.2 69.8 70.4 C4. Market Financing 70.0 64.7 60.5 57.1 54.2 52.2 50.5 48.9 47.4 46.0 44.6 TOTAL public debt benchmark 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0 PV of Debt-to-Revenue Ratio Baseline 402.3 368.9 329.2 313.1 298.0 288.6 278.7 269.8 261.9 254.5 247.5 A. Alternative Scenarios A1. Key variables at their historical averages in 2024-2034 2/ 402.3 369.9 326.5 308.3 292.9 285.5 277.6 270.9 264.9 259.7 255.1 0 396 366 329 315 302 295 288 281 275 269 264 B. Bound Tests B1. Real GDP growth 402.3 389.2 375.2 368.3 362.7 364.1 364.6 365.9 368.1 370.8 373.8 B2. Primary balance 402.3 403.3 404.4 391.0 378.5 372.5 365.2 358.7 352.9 347.6 342.4 B3. Exports 402.3 389.2 383.8 368.9 354.9 346.9 338.0 330.1 323.2 315.8 306.7 B4. Other flows 3/ 402.3 398.5 382.7 367.8 353.8 345.8 336.9 328.9 322.1 314.1 305.0 B5. Depreciation 402.3 402.3 354.0 332.5 312.9 299.8 286.3 274.0 263.0 252.6 242.8 B6. Combination of B1-B5 402.3 385.9 379.2 366.9 355.7 350.7 344.4 338.7 333.7 328.8 324.1 C. Tailored Tests C1. Combined contingent liabilities 402.3 424.4 384.4 370.4 357.6 351.3 343.9 337.3 331.5 326.0 320.8 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 402.3 433.9 405.6 408.4 399.4 395.4 388.5 380.6 383.5 386.7 390.3 C4. Market Financing 402.3 368.9 329.2 313.3 298.7 289.6 279.9 271.0 262.8 254.8 247.3 Debt Service-to-Revenue Ratio Baseline 59.2 71.7 71.3 71.0 72.4 62.6 61.2 62.1 60.8 60.1 58.5 A. Alternative Scenarios A1. Key variables at their historical averages in 2024-2034 2/ 59.2 68.1 71.1 71.5 72.6 65.5 64.4 64.8 63.4 62.4 61.2 0 59 71 74 75 77 69 67 68 67 66 64 B. Bound Tests B1. Real GDP growth 59.2 74.3 81.5 85.7 91.1 84.2 84.3 87.7 88.5 89.8 90.2 B2. Primary balance 59.2 71.6 86.3 97.1 96.1 87.4 85.8 87.2 85.3 83.9 82.6 B3. Exports 59.2 71.7 72.8 75.5 77.0 67.3 66.0 66.9 65.8 66.2 66.6 B4. Other flows 3/ 59.2 71.7 73.6 75.4 76.9 67.2 65.9 66.8 65.7 66.6 66.4 B5. Depreciation 59.2 68.5 72.1 73.5 75.7 67.5 65.3 65.8 64.3 63.2 61.3 B6. Combination of B1-B5 59.2 69.7 74.2 82.8 85.6 77.7 76.4 77.9 77.4 76.8 75.1 C. Tailored Tests C1. Combined contingent liabilities 59.2 71.6 93.4 88.8 90.8 82.5 80.9 82.1 79.4 77.9 75.8 C2. Natural disaster n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. C3. Commodity price 59.2 80.7 87.5 94.6 100.0 92.4 91.2 92.5 92.9 94.0 94.4 C4. Market Financing 59.2 71.7 71.3 71.2 73.4 64.0 62.5 65.7 63.5 59.7 58.1 Sources: Country authorities; and staff estimates and projections. 1/ A bold value indicates a breach of the benchmark. 2/ Variables include real GDP growth, GDP deflator and primary deficit in percent of GDP. 3/ Includes official and private transfers and FDI. 27 >>>