INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL MONETARY FUND MALI Joint World Bank-IMF Debt Sustainability Analysis April 2020 Prepared jointly by the staffs of the International Development Association (IDA) and the International Monetary Fund (IMF) Approved by Marcello Estevão (IDA), Annalisa Fedelino and Maria Gonzalez (IMF) Mali: Joint Bank-Fund Staff Debt Sustainability Analysis 1 Risk of external debt distress Moderate 2 Overall risk of debt distress Moderate Granularity in risk rating Some space to absorb shocks Application of judgement Yes, a customized scenario was used to take account of security challenges and sensitivity to small changes in financing terms (see the previous DSA, September 2019) Macroeconomic projections Growth revised down by 4.2 percentage points from previous DSA Financing strategy External: IMF RCF/World Bank IDA/BAD BOAD/other donors Domestic: Bonds/Bills issuances Realism tools flagged Yes, pessimistic growth in 2020 despite massive fiscal stimulus Mechanical risk rating under Low the external DSA Mechanical risk rating under Low the public DSA 1 Public debt coverage remains the central government debt, which is unchanged from the previous DSA. 2Mali’s composite indicator is 3.02 based on October 2019 WEO and the 2018 CPIA, confirming the medium debt carrying capacity from the previous DSA. Under the COVID-19 baseline, Mali’s risk of external and total public debt distress remains moderate – unchanged from the previous analysis (IMF Country Report/19/289). Overall public debt dynamics remain sustainable with some space to absorb shocks. A large share of fiscal and external financing needs is expected to be covered by concessional multilateral and bilateral creditor loans. All the projected external debt burden indicators remain below their thresholds under the baseline. However, applying judgment to take account of security challenges and sensitivity to small changes in financing terms, the ratio of external debt service to exports exceeds its threshold in the case of an extreme shock to exports under a customized scenario that incorporates 2 percentage points of GDP larger fiscal deficits. Mali’s main challenge continues to be ensuring macroeconomic stability while protecting social and investment spending and providing for growing security spending and large development needs especially given additional vulnerabilities arising from the COVID-19 Pandemic. To maintain sustainable level of debt, it is essential that the authorities continue their efforts to mobilize domestic revenue and implement reforms. Debt management capacity should be strengthened while deepening structural reforms to diversify the exports base. 2 Figure 1. Mali: Indicators of Public and Publicly Guaranteed External Debt Under Alternative Scenarios, 2020–30 PV of debt-to GDP ratio PV of debt-to-exports ratio 45 200 40 35 150 30 25 100 20 15 50 10 5 0 0 -5 Most extreme shock: One-time depreciation Most extreme shock: Exports -10 -50 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Debt service-to-exports ratio Debt service-to-revenue ratio 16 20 18 14 16 12 14 10 12 8 10 8 6 6 4 4 2 2 Most extreme shock: Exports Most extreme shock: One-time depreciation 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Baseline Historical scenario Most extreme shock 1/ Threshold Customization of Default Settings Borrowing assumptions on additional financing needs resulting from the stress tests* Size Interactions Default User defined Shares of marginal debt No No External PPG MLT debt 100% Tailored Stress Terms of marginal debt Combined CL No Avg. nominal interest rate on new borrowing in USD 1.3% 1.3% Natural disaster n.a. n.a. USD Discount rate 5.0% 5.0% Commodity price No No Avg. maturity (incl. grace period) 28 28 Market financing n.a. n.a. Avg. grace period 5 5 Note: "Yes" indicates any change to the size or interactions of * Note: All the additional financing needs generated by the shocks under the stress tests are the default settings for the stress tests. "n.a." indicates that the assumed to be covered by PPG external MLT debt in the external DSA. Default terms of marginal stress test does not apply. 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 2030. 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. 3 Figure 2. Mali: Indicators of Public Debt Under Alternative Scenarios, 2020–30 PV of Debt-to-GDP Ratio 60 50 40 30 20 Most extreme shock: Commodity price 10 0 2020 2022 2024 2026 2028 2030 PV of Debt-to-Revenue Ratio Debt Service-to-Revenue Ratio 300 80 70 250 60 200 50 150 40 30 100 20 50 Most extreme shock: Commodity price Most extreme shock: Commodity price 10 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Baseline Most extreme shock 1/ TOTAL public debt benchmark Historical scenario Borrowing assumptions on additional financing needs resulting from the stress Default User defined tests* Shares of marginal debt External PPG medium and long-term 21% 21% Domestic medium and long-term 71% 71% Domestic short-term 8% 8% Terms of marginal debt External MLT debt Avg. nominal interest rate on new borrowing in USD 1.3% 1.3% Avg. maturity (incl. grace period) 28 28 Avg. grace period 5 5 Domestic MLT debt Avg. real interest rate on new borrowing 4.8% 4.8% Avg. maturity (incl. grace period) 4 4 Avg. grace period 0 0 Domestic short-term debt Avg. real interest rate 4.5% 4.5% * 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. 1/ The most extreme stress test is the test that yields the highest ratio in or before 2030. 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. 4 Figure 3. Mali: Drivers of Debt Dynamics – Baseline Scenario 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 30 80 Residual 20 Previous DSA proj. 20 70 DSA-2013 Interquartile 15 range (25-75) Price and 60 exchange rate10 50 10 Real GDP growth 0 Change in PPG 40 debt 3/ 5 30 Nominal -10 interest rate 20 0 Median -20 Current 10 account + FDI -5 0 -30 Change in 5-year 5-year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 PPG debt 3/ Contribution of Distribution across LICs 2/ historical projected -10 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 30 Current DSA Previous DSA proj. 20 DSA-2013 Interquartile 80 Other debt 20 range (25-75) creating flows 15 70 Real Exchange 60 rate 10 depreciation 10 50 Real GDP Change in debt 40 growth 0 5 30 Real interest rate -10 0 20 Primary deficit 10 -20 -5 Median 0 Change in debt 5-year 5-year Distribution across LICs 2/ 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 historical projected Contribution of -10 unexpected change change 1/ Difference between anticipated and actual contributions on debt ratios. 2/ Distribution across LICs for which LIC DSAs were 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. 5 Figure 4. Mali: Indicators of Public and Publicly Guaranteed External Debt Under Customized Scenarios, 2020–30 PV of debt-to GDP ratio PV of debt-to-exports ratio 45 200 40 180 35 160 140 30 120 25 100 20 80 15 60 10 40 5 Most extreme shock: Combination 20 Most extreme shock: Exports 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Debt service-to-exports ratio Debt service-to-revenue ratio 18 20 16 18 16 14 14 12 12 10 10 8 8 6 6 4 4 2 2 Most extreme shock: Exports Most extreme shock: Combination 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Baseline Historical scenario Most extreme shock 1/ Threshold Customization of Default Settings Borrowing assumptions on additional financing needs resulting from the stress tests* Size Interactions Default User defined Shares of marginal debt No No External PPG MLT debt 100% Tailored Stress Terms of marginal debt Combined CL No Avg. nominal interest rate on new borrowing in USD 2.3% 2.3% Natural disaster n.a. n.a. USD Discount rate 5.0% 5.0% Commodity price No No Avg. maturity (incl. grace period) 21 21 Market financing n.a. n.a. Avg. grace period 4 4 Note: "Yes" indicates any change to the size or interactions of * Note: All the additional financing needs generated by the shocks under the stress tests are the default settings for the stress tests. "n.a." indicates that the assumed to be covered by PPG external MLT debt in the external DSA. Default terms of marginal stress test does not apply. 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 2030. 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. 6 Figure 5. Mali: Indicators of Public Debt Under Customized Scenarios, 2020–30 PV of Debt-to-GDP Ratio 60 50 40 30 20 Most extreme shock: Commodity price 10 0 2020 2022 2024 2026 2028 2030 PV of Debt-to-Revenue Ratio Debt Service-to-Revenue Ratio 300 70 60 250 50 200 40 150 30 100 20 50 Most extreme shock: Commodity price Most extreme shock: Commodity price 10 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Baseline Most extreme shock 1/ TOTAL public debt benchmark Historical scenario Borrowing assumptions on additional financing needs resulting from the stress Default User defined tests* Shares of marginal debt External PPG medium and long-term 36% 36% Domestic medium and long-term 58% 58% Domestic short-term 6% 6% Terms of marginal debt External MLT debt Avg. nominal interest rate on new borrowing in USD 2.3% 2.3% Avg. maturity (incl. grace period) 21 21 Avg. grace period 4 4 Domestic MLT debt Avg. real interest rate on new borrowing 4.8% 4.8% Avg. maturity (incl. grace period) 4 4 Avg. grace period 0 0 Domestic short-term debt Avg. real interest rate 4.5% 4.5% * 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. 1/ The most extreme stress test is the test that yields the highest ratio in or before 2030. 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. 7 Figure 6. Mali: Realism Tools 3-Year Adjustment in Primary Balance Fiscal Adjustment and Possible Growth Paths 1/ (Percentage points of GDP) 10 4 9 3 Distribution 1/ 14 8 2 In percentage points of GDP Projected 3-yr 7 12 1 adjustment 3-year PB adjustment greater 6 0 In percent than 2.5 percentage points of 10 5 GDP in approx. top quartile -1 4 8 -2 3 6 2 -3 1 -4 4 0 -5 2 2014 2015 2016 2017 2018 2019 2020 2021 Baseline Multiplier = 0.2 Multiplier = 0.4 0 Multiplier = 0.6 Multiplier = 0.8 more -4.5 -4.0 -3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 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 1/ Data cover Fund-supported programs for LICs (excluding emergency financing) approved since 1990. The 1/ Bars refer to annual projected fiscal adjustment (right-hand side scale) and lines show possible size of 3-year adjustment from program inception is found on the horizontal axis; the percent of sample is real GDP growth paths under different fiscal multipliers (left-hand side scale). found on the vertical axis. Public and Private Investment Rates Contribution to Real GDP growth (percent of GDP) (percent, 5-year average) 16 6 14 5 12 4 10 8 3 6 2 4 1 2 0 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Historical Projected (Prev. DSA) Projected (Curr. DSA) Gov. Invest. - Prev. DSA Gov. Invest. - Curr. DSA Contribution of other factors Priv. Invest. - Prev. DSA Priv. Invest. - Curr. DSA Contribution of government capital Sources: Country authorities and staff estimates and projections. 8 Figure 7. Mali: Qualification of the Moderate Risk Category. 2019–29 1/ PV of debt-to GDP ratio PV of debt-to-exports ratio 45 200 40 180 Threshold 35 160 140 (1-X)*Threshold 30 120 25 (1-Y)*&Threshold 100 20 80 15 60 10 40 5 20 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Debt service-to-exports ratio Debt service-to-revenue ratio 16 20 18 14 16 12 14 10 12 8 10 8 6 6 4 4 2 2 0 0 2020 2022 2024 2026 2028 2030 2020 2022 2024 2026 2028 2030 Threshold Baseline Limited space Some space Substantial space Sources: Country authorities; and staff estimates and projections. 1/ For the PV debt/GDP and PV debt/exports thresholds, x is 20 percent and y is 40 percent. For debt service/Exports and debt service/revenue thresholds, x is 12 percent and y is 35 percent. 9 Table 1. Mali: External Debt Sustainability Framework, Baseline Scenario, 2017–40 (In percent of GDP, unless otherwise indicated) Actual Projections Average 8/ 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030 2040 Historical Projections External debt (nominal) 1/ 25.0 24.9 26.4 30.1 29.7 28.1 26.6 25.3 24.4 20.3 12.7 22.9 24.8 Definition of external/domestic debt Currency-based of which: public and publicly guaranteed (PPG) 25.0 24.9 26.4 30.1 29.7 28.1 26.6 25.3 24.4 20.3 12.7 22.9 24.8 Is there a material difference between the No two criteria? Change in external debt -0.1 -0.1 1.5 3.7 -0.4 -1.7 -1.5 -1.3 -0.9 -0.6 -3.0 Identified net debt-creating flows 1.6 -0.2 1.9 2.5 0.9 2.1 3.4 3.7 4.3 11.2 -0.7 1.7 5.4 Non-interest current account deficit 7.0 4.7 3.9 3.2 3.4 5.0 6.1 6.4 6.9 13.7 -0.2 5.3 7.8 Deficit in balance of goods and services 13.7 11.2 10.6 7.1 7.7 8.7 9.0 8.9 8.9 12.1 0.0 12.6 9.5 Exports 22.5 24.7 24.6 24.4 25.4 24.5 24.2 23.9 23.6 20.0 0.0 Debt Accumulation Imports 36.2 35.8 35.2 31.5 33.1 33.3 33.1 32.8 32.4 32.1 0.0 6.0 45 Net current transfers (negative = inflow) -9.7 -9.2 -9.5 -6.6 -7.0 -6.4 -5.6 -5.3 -4.6 -0.4 0.0 -10.3 -4.2 of which: official -4.8 -4.4 -4.8 -3.5 -4.2 -4.0 -3.6 -3.8 -3.6 -2.9 0.0 Other current account flows (negative = net inflow) 3.0 2.8 2.7 2.8 2.7 2.7 2.7 2.7 2.6 2.0 -0.2 3.0 2.5 5.0 40 Net FDI (negative = inflow) -3.6 -2.8 -1.8 -0.9 -1.7 -1.7 -1.7 -1.7 -1.7 -1.7 0.0 -2.6 -1.7 Endogenous debt dynamics 2/ -1.9 -2.1 -0.2 0.1 -0.7 -1.2 -0.9 -0.9 -0.8 -0.7 -0.5 4.0 35 Contribution from nominal interest rate 0.3 0.2 0.3 0.4 0.4 0.4 0.4 0.4 0.3 0.2 0.2 Contribution from real GDP growth -1.2 -1.2 -1.2 -0.2 -1.1 -1.6 -1.3 -1.2 -1.2 -1.0 -0.7 3.0 30 Contribution from price and exchange rate changes -1.0 -1.2 0.7 … … … … … … … … Residual 3/ -1.6 0.1 -0.4 1.2 -1.3 -3.7 -4.9 -5.1 -5.2 -11.9 -2.3 -1.1 -5.9 of which: exceptional financing -0.2 -0.2 -0.2 -0.1 -0.1 0.0 0.0 0.0 0.0 0.0 0.0 2.0 25 Sustainability indicators 1.0 20 PV of PPG external debt-to-GDP ratio ... ... 17.9 20.8 20.4 19.2 18.1 17.1 16.7 14.0 9.5 PV of PPG external debt-to-exports ratio ... ... 72.9 85.1 80.4 78.1 74.8 71.7 71.1 70.1 ... 0.0 15 PPG debt service-to-exports ratio 4.6 3.7 5.2 6.6 6.9 7.2 6.9 6.7 5.3 6.2 ... 2020 2022 2024 2026 2028 2030 PPG debt service-to-revenue ratio 5.6 6.3 6.6 9.1 9.0 9.6 9.0 8.5 6.6 6.2 ... Gross external financing need (Million of U.S. dollars) 691.2 485.0 584.7 709.1 639.1 1043.2 1331.5 1473.8 1605.6 4725.0 540.4 Debt Accumulation Grant-equivalent financing (% of GDP) Key macroeconomic assumptions Grant element of new borrowing (% right scale) Real GDP growth (in percent) 5.0 5.2 5.1 0.9 4.0 6.0 5.0 5.0 5.0 5.0 5.0 4.4 4.6 GDP deflator in US dollar terms (change in percent) 4.2 5.1 -2.9 1.3 2.8 2.5 2.3 2.2 1.2 2.0 11.7 1.3 2.1 Effective interest rate (percent) 4/ 1.1 1.0 1.3 1.4 1.5 1.5 1.5 1.5 1.4 1.3 1.5 0.6 1.3 External debt (nominal) 1/ Growth of exports of G&S (US dollar terms, in percent) 5.0 21.3 1.8 1.5 11.0 5.0 5.9 6.1 4.8 4.0 -100.0 6.6 4.9 of which: Private Growth of imports of G&S (US dollar terms, in percent) -1.7 9.5 0.3 -8.4 12.0 9.3 7.0 6.2 5.1 6.8 -100.0 6.4 6.1 35 Grant element of new public sector borrowing (in percent) ... ... ... 32.7 37.8 40.6 41.1 40.3 39.3 35.4 #DIV/0! ... 37.8 Government revenues (excluding grants, in percent of GDP) 18.4 14.4 19.5 17.9 19.4 18.5 18.7 18.8 18.9 19.8 0.0 15.8 19.0 30 Aid flows (in Million of US dollars) 5/ 248.1 210.8 326.5 857.5 662.5 701.8 712.8 759.9 752.9 849.7 0.0 Grant-equivalent financing (in percent of GDP) 6/ ... ... ... 4.9 3.0 2.9 2.7 2.7 2.5 2.1 ... ... 2.7 25 Grant-equivalent financing (in percent of external financing) 6/ ... ... ... 55.4 63.8 70.4 72.2 72.4 70.6 65.7 ... ... 67.5 Nominal GDP (Million of US dollars) 15,360 16,978 17,331 17,717 18,933 20,574 22,093 23,708 25,191 35,852 79,643 20 Nominal dollar GDP growth 9.5 10.5 2.1 2.2 6.9 8.7 7.4 7.3 6.3 7.1 17.3 5.7 6.8 15 Memorandum items: 10 PV of external debt 7/ ... ... 17.9 20.8 20.4 19.2 18.1 17.1 16.7 14.0 9.5 In percent of exports ... ... 72.9 85.1 80.4 78.1 74.8 71.7 71.1 70.1 ... 5 Total external debt service-to-exports ratio 4.6 3.7 5.2 6.6 6.9 7.2 6.9 6.7 5.3 6.2 ... PV of PPG external debt (in Million of US dollars) 3110.2 3683.7 3862.4 3941.6 3997.3 4063.5 4218.3 5021.8 7535.3 0 (PVt-PVt-1)/GDPt-1 (in percent) 3.3 1.0 0.4 0.3 0.3 0.7 0.6 -0.5 2020 2022 2024 2026 2028 2030 Non-interest current account deficit that stabilizes debt ratio 7.1 4.8 2.3 -0.5 3.8 6.7 7.5 7.7 7.8 14.3 2.8 Sources: Country authorities; and staff estimates and projections. 1/ Includes both public and private sector external debt. 2/ Derived as [r - g - ρ(1+g)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = growth rate of GDP deflator in U.S. dollar terms. 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. 10 Table 2. Mali: Public Sector Debt Sustainability Framework, Baseline Scenario, 2017–40 (In percent of GDP, unless otherwise indicated) Actual Projections Average 6/ 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030 2040 Historical Projections Public sector debt 1/ 36.0 37.7 40.4 44.7 45.1 44.9 44.8 44.9 44.8 44.6 41.3 30.9 44.7 Definition of external/domestic of which: external debt 25.0 24.9 26.4 30.1 29.7 28.1 26.6 25.3 24.4 20.3 12.7 22.9 24.8 Currency-based debt of which: local-currency denominated Change in public sector debt 0.0 1.7 2.7 4.2 0.4 -0.2 0.0 0.0 -0.1 0.1 -4.8 Is there a material difference Identified debt-creating flows -2.3 3.6 -0.6 4.3 0.2 -0.5 0.0 0.0 0.1 0.3 -4.8 0.9 0.5 No between the two criteria? Primary deficit 2.0 3.9 0.7 5.0 1.7 1.6 1.5 1.5 1.5 1.5 0.0 2.1 1.8 Revenue and grants 20.1 15.7 21.4 20.9 21.4 20.6 20.6 20.8 20.7 21.3 0.0 17.8 20.9 of which: grants 1.6 1.2 1.9 3.0 2.0 2.1 2.0 2.0 1.9 1.5 0.0 Public sector debt 1/ Primary (noninterest) expenditure 22.1 19.5 22.1 26.0 23.1 22.2 22.1 22.2 22.2 22.8 0.0 19.9 22.7 Automatic debt dynamics -4.2 -0.2 -1.2 -0.1 -1.3 -2.1 -1.5 -1.5 -1.4 -1.1 -4.8 of which: local-currency denominated Contribution from interest rate/growth differential -1.6 -1.6 -1.6 0.4 -1.2 -2.0 -1.5 -1.4 -1.4 -1.2 -3.5 of which: foreign-currency denominated of which: contribution from average real interest rate 0.1 0.2 0.2 0.7 0.5 0.6 0.7 0.7 0.8 0.9 -1.3 of which: contribution from real GDP growth -1.7 -1.8 -1.8 -0.4 -1.7 -2.6 -2.1 -2.1 -2.1 -2.1 -2.2 50 Contribution from real exchange rate depreciation -2.6 1.4 0.4 ... ... ... ... ... ... ... ... 45 Other identified debt-creating flows -0.1 -0.1 0.0 -0.6 -0.2 0.0 0.0 0.0 0.0 0.0 0.0 -0.2 -0.1 40 35 Privatization receipts (negative) 0.1 0.1 0.1 -0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 30 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 0.0 0.0 25 Debt relief (HIPC and other) -0.2 -0.2 -0.2 -0.4 -0.2 0.0 0.0 0.0 0.0 0.0 0.0 20 Other debt creating or reducing flow (please specify) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15 Residual 2.3 -1.9 3.3 -0.6 0.1 0.2 -0.1 0.0 -0.1 -0.1 -1.3 0.9 -0.1 10 5 Sustainability indicators 0 PV of public debt-to-GDP ratio 2/ ... ... 32.1 35.2 35.7 35.9 36.3 36.7 37.0 38.4 38.1 2020 2022 2024 2026 2028 2030 PV of public debt-to-revenue and grants ratio … … 150.0 168.3 167.2 174.4 176.0 176.5 178.4 179.9 #DIV/0! Debt service-to-revenue and grants ratio 3/ 31.8 32.7 24.0 30.0 34.8 41.9 42.6 46.2 45.8 52.1 #DIV/0! Gross financing need 4/ 8.3 8.9 5.8 10.5 8.9 10.3 10.3 11.1 11.0 12.6 12.3 of which: held by residents of which: held by non-residents Key macroeconomic and fiscal assumptions 1 Real GDP growth (in percent) 5.0 5.2 5.1 0.9 4.0 6.0 5.0 5.0 5.0 5.0 5.0 4.4 4.6 1 Average nominal interest rate on external debt (in percent) 1.2 1.0 1.4 1.4 1.5 1.5 1.5 1.5 1.4 1.3 1.5 0.6 1.3 1 Average real interest rate on domestic debt (in percent) 2.9 5.0 2.7 3.9 4.7 5.0 5.1 4.9 5.1 5.0 -4.3 3.0 4.9 1 Real exchange rate depreciation (in percent, + indicates depreciation) -11.1 6.0 1.7 … ... ... ... ... ... ... ... 1.5 ... 1 1 n.a. Inflation rate (GDP deflator, in percent) 2.1 0.4 2.5 1.8 1.7 2.0 2.0 2.0 2.0 2.0 11.7 3.3 2.0 0 Growth of real primary spending (deflated by GDP deflator, in percent) 7.6 -7.0 18.7 18.8 -7.7 2.0 4.7 5.5 4.7 5.9 … 5.3 5.1 0 Primary deficit that stabilizes the debt-to-GDP ratio 5/ 2.0 2.1 -2.1 0.8 1.3 1.8 1.5 1.4 1.5 1.3 4.8 0.7 1.4 0 PV of contingent liabilities (not included in public sector debt) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0 0 2020 2022 2024 2026 2028 2030 Sources: Country authorities; and staff estimates and projections. 1/ Coverage of debt: The central government . Definition of external debt is Currency-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. 11 Table 3. Mali: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2020–30 (In percent) Projections 1/ 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 PV of debt-to GDP ratio Baseline 21 20 19 18 17 17 16 15 15 14 14 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 21 21 20 18 16 15 12 8 4 -1 -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 21 21 21 19 18 18 17 17 16 15 15 B2. Primary balance 21 21 20 19 18 17 17 16 16 15 15 B3. Exports 21 22 24 23 22 21 20 19 19 18 17 B4. Other flows 3/ 21 23 24 23 22 21 20 20 19 18 17 B5. Depreciation 21 26 21 20 18 18 17 16 16 16 15 B6. Combination of B1-B5 21 25 24 23 22 21 20 19 19 18 17 C. Tailored Tests C1. Combined contingent liabilities 21 22 21 20 19 19 18 18 17 17 17 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 21 21 20 19 18 18 17 16 15 15 14 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Threshold 40 40 40 40 40 40 40 40 40 40 40 PV of debt-to-exports ratio Baseline 85 80 78 75 72 71 70 70 70 70 70 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 85 84 82 76 69 62 52 37 17 -7 -36 0 85 76 71 65 59 55 51 47 44 41 39 B. Bound Tests B1. Real GDP growth 85 80 78 75 72 71 70 70 70 70 70 B2. Primary balance 85 81 80 77 74 74 74 74 74 74 75 B3. Exports 85 100 118 114 110 109 108 107 106 105 104 B4. Other flows 3/ 85 90 99 95 91 91 90 89 88 87 86 B5. Depreciation 85 80 68 64 61 61 60 60 60 61 61 B6. Combination of B1-B5 85 99 90 97 93 92 91 90 89 89 88 C. Tailored Tests C1. Combined contingent liabilities 85 85 84 81 79 80 80 81 82 83 84 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 85 85 85 81 77 76 74 73 72 72 71 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Threshold 180 180 180 180 180 180 180 180 180 180 180 Debt service-to-exports ratio Baseline 7 7 7 7 7 5 6 6 6 6 6 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 7 7 8 7 7 6 6 7 6 5 5 0 7 7 7 7 6 5 5 5 4 3 3 B. Bound Tests B1. Real GDP growth 7 7 7 7 7 5 6 6 6 6 6 B2. Primary balance 7 7 7 7 7 5 6 6 6 6 6 B3. Exports 7 8 9 9 9 7 8 9 9 9 9 B4. Other flows 3/ 7 7 7 7 7 6 6 7 8 8 8 B5. Depreciation 7 7 7 7 6 5 6 6 5 5 5 B6. Combination of B1-B5 7 7 8 8 8 6 7 8 8 8 8 C. Tailored Tests C1. Combined contingent liabilities 7 7 7 7 7 5 6 6 6 6 6 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 7 7 8 7 7 6 6 7 7 6 6 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Threshold 15 15 15 15 15 15 15 15 15 15 15 Debt service-to-revenue ratio Baseline 9 9 10 9 9 7 7 7 7 6 6 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 9 9 10 9 9 7 7 7 7 6 5 0 9 9 9 9 8 6 6 6 5 3 3 B. Bound Tests B1. Real GDP growth 9 9 10 10 9 7 8 8 7 7 7 B2. Primary balance 9 9 10 9 9 7 7 7 7 7 6 B3. Exports 9 9 10 10 9 7 8 8 8 8 8 B4. Other flows 3/ 9 9 10 10 9 7 8 8 8 8 8 B5. Depreciation 9 11 12 11 10 8 9 9 7 7 7 B6. Combination of B1-B5 9 10 11 10 10 8 8 9 8 8 8 C. Tailored Tests C1. Combined contingent liabilities 9 9 10 9 9 7 7 7 7 7 6 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 9 10 10 9 7 7 7 7 7 7 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Threshold 18 18 18 18 18 18 18 18 18 18 18 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. 12 Table 4. Mali: Sensitivity Analysis for Key Indicators of Public Debt, 2020–30 Projections 1/ 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 PV of Debt-to-GDP Ratio Baseline 35 36 36 36 37 37 37 37 38 38 38 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 35 35 36 37 37 38 38 39 39 40 41 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 35 38 41 42 44 45 47 48 49 51 52 B2. Primary balance 35 37 39 39 39 39 40 40 40 40 40 B3. Exports 35 38 41 41 41 41 41 41 41 41 41 B4. Other flows 3/ 35 38 41 41 41 42 42 42 41 42 42 B5. Depreciation 35 40 38 37 36 35 34 33 32 32 31 B6. Combination of B1-B5 35 36 36 36 36 36 36 36 37 37 37 C. Tailored Tests C1. Combined contingent liabilities 35 43 43 43 44 44 44 44 44 44 44 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 35 37 39 42 44 46 48 49 51 52 54 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. TOTAL public debt benchmark 55 55 55 55 55 55 55 55 55 55 55 PV of Debt-to-Revenue Ratio Baseline 168 167 174 176 177 178 179 179 179 180 180 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 168 165 175 178 181 184 186 187 189 190 192 0 30 29 32 30 31 30 30 31 30 30 31 B. Bound Tests B1. Real GDP growth 168 176 196 203 210 217 223 229 234 239 244 B2. Primary balance 168 173 188 189 189 191 190 190 190 190 190 B3. Exports 168 176 197 198 197 199 198 197 196 195 194 B4. Other flows 3/ 168 179 199 200 199 200 200 199 197 197 195 B5. Depreciation 168 188 186 181 175 172 166 161 156 151 147 B6. Combination of B1-B5 168 167 176 174 174 175 174 174 174 175 175 C. Tailored Tests C1. Combined contingent liabilities 168 203 210 211 210 210 210 209 208 207 206 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 168 179 197 210 218 227 232 236 241 247 252 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Debt Service-to-Revenue Ratio Baseline 30 35 42 43 46 46 48 50 50 51 52 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 30 34 41 43 47 47 49 52 53 54 55 0 30 29 32 30 31 30 30 31 30 30 31 B. Bound Tests B1. Real GDP growth 30 36 46 49 54 56 60 64 66 68 71 B2. Primary balance 30 35 44 47 50 50 52 53 53 54 55 B3. Exports 30 35 42 43 47 46 48 51 52 52 53 B4. Other flows 3/ 30 35 42 43 47 46 48 51 52 52 53 B5. Depreciation 30 34 42 41 45 44 46 48 48 48 49 B6. Combination of B1-B5 30 34 41 43 46 46 48 49 49 50 51 C. Tailored Tests C1. Combined contingent liabilities 30 35 54 54 58 59 57 59 59 59 59 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 30 36 45 49 55 58 62 66 68 70 73 C4. Market Financing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 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. 13