INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL MONETARY FUND HAITI 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), Patricia Alonso-Gamo, and Jeromin Zettelmeyer (IMF) Haiti: Joint Bank-Fund Debt Sustainability Analysis Risk of external debt distress High Overall risk of debt distress High Granularity in the risk rating Debt is sustainable in the medium-term. Long-term sustainability will require fiscal consolidation, including through higher domestic revenue mobilization. Application of judgment Yes: High probability of protracted and substantial threshold breaches from FY2033. Compared to the December 2019 DSA, growth in the short-term has been revised down and inflation revised up. The projected fiscal deficit as a percent of GDP is 3.0, 0.8 Macroeconomic projections and 0.9 percent higher respectively in FY2020, 2021-24, and 2025-35. The projected current account deficit is higher in the short term, but 0.5 percent of GDP smaller on average over 2025-35. Future gross financing needs are assumed to be met both internally—by the rollover of central bank advances to the government—and externally. Remaining internal Financing strategy financing takes the form of short-term treasury bills held by commercial banks. External debt financing, contracted or guaranteed, is assumed to be mostly concessional. The baseline assumptions are credible, and the projected Realism tools flagged fiscal adjustment is realistic. Mechanical risk rating under the external DSA Moderate risk Mechanical risk rating under the public DSA Moderate risk The Debt Sustainability Analysis (DSA) was prepared in accordance with the revised joint Bank- Fund debt sustainability framework (DSF) for low-income countries (LICs). 1 It updates the DSA prepared for the 2019 Article IV Consultation.2 Haiti’s risk of debt distress is assessed to be “high”, although the model-based risk rating for both external and overall public debt is “moderate.” An application of judgement was applied to change the rating from “moderate” to “high” because of the high probability of threshold breaches under the baseline scenario from FY2033, and by Haiti’s institutional fragilities and exceptional vulnerability to natural disasters. Haiti is an FCV country—a country affected by fragility, conflict, and violence as defined by the World Bank—and tailored stress tests suggest that its debt risk rating is very vulnerable to large natural disaster shocks which are statistically very frequent. Nevertheless, the moderate level of public debt and broadly stable debt trajectory over the next ten years point to sustainable public debt. 1 Guidance Note on the Bank-Fund Debt Sustainability Framework for Low-Income Countries, February 2018. 2 This DSA assumes that debt service to the IMF falling due in the 24 months from April 14, 2020 will be covered under the Catastrophe Containment and Relief Trust Fund (CCRTF), subject to availability of resources and decisions of the Executive Board of the IMF. 2 Figure 1. Haiti: Indicators of Public and Publicly Guaranteed External Debt under Alternatives Scenarios, 2020–40 PV of debt-to GDP ratio PV of debt-to-exports ratio 60 400 350 50 300 40 250 30 200 150 20 100 10 Most extreme shock is Non-debt flows 50 Most extreme shock is Combination 0 0 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 Debt service-to-exports ratio Debt service-to-revenue ratio 30 30 25 25 20 20 15 15 10 10 5 5 Most extreme shock is Combination Most extreme shock is Non-debt flows 0 0 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 Baseline Historical scenario Most extreme shock 1/ Threshold Customization of Default Settings Borrowing Assumptions for Stress Tests* Size Interactions Default User defined Shares of marginal debt No No External PPG MLT debt 100% Tailored Tests Terms of marginal debt Combined CLs No Avg. nominal interest rate on new borrowing in USD 1.7% 1.7% Natural Disasters Yes No USD Discount rate 5.0% 5.0% Commodity Prices 2/ n.a. n.a. Avg. maturity (incl. grace period) 23 23 Market Financing n.a. n.a. Avg. grace period 5 5 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 are assumed to be covered by PPG external MLT debt in the external DSA. Default terms tests. "n.a." indicates that the stress test does not of marginal debt are based on baseline 10-year projections. apply. 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. Stress tests with one-off breaches are also presented (if any), while these one-off breaches are 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. Haiti: Indicators of Public Debt Under Alternatives Scenarios, 2020–40 PV of Debt-to-GDP Ratio 80 70 60 50 40 30 20 Most extreme shock is Natural disaster 10 0 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 PV of Debt-to-Revenue Ratio Debt Service-to-Revenue Ratio 500 300 450 250 400 Most extreme shock is 350 200 Natural disaster 300 250 150 200 100 150 100 50 Most extreme shock is Natural disaster 50 0 0 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 Baseline Most extreme shock 1/ Public debt benchmark Historical scenario Borrowing Assumptions for Stress Tests* Default User defined Shares of marginal debt External PPG medium and long-term 8% 8% Domestic medium and long-term 0% 0% Domestic short-term 92% 92% Terms of marginal debt External MLT debt Avg. nominal interest rate on new borrowing in USD 1.7% 1.7% Avg. maturity (incl. grace period) 23 23 Avg. grace period 5 5 Domestic MLT debt Avg. real interest rate on new borrowing 0.0% 0.0% Avg. maturity (incl. grace period) 1 1 Avg. grace period 0 0 Domestic short-term debt Avg. real interest rate -11.0% -11.0% * 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. Haiti: Drivers of Debt Dynamics-Baseline Scenario 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 10 80 Residual 20 Previous DSA proj. 70 DSA-2015 Interquartile Price and 5 15 range (25-75) 60 exchange rate 50 Real GDP 10 growth 0 Change in PPG 40 debt 3/ 5 Nominal 30 interest rate -5 20 0 Median Current 10 account + FDI -5 -10 0 Change in Contribution of 5-year 5-year unexpected Distribution across LICs 2/ 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 PPG debt 3/ historical projected -1 0 changes 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 40 Current DSA 20 Previous DSA proj. DSA-2015 Other debt Interquartile 80 creating flows range (25-75) 20 15 70 Real 60 Exchange rate 10 50 depreciation Real GDP 0 growth Change in debt 40 5 Real interest 30 rate -20 20 0 Primary deficit 10 -40 -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 change change -10 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. 5 Figure 4. Haiti: Realism Tools 3-Year Adjustment in Primary Balance Fiscal Adjustment and Possible Growth Paths 1/ (Percentage points of GDP) 4.0 3 Distribution 1/ 14 3.0 2 Projected 3-yr 12 2.0 adjustment In percentage points of GDP 3-year PB adjustment greater than 1 2.5 percentage points of GDP in 1.0 10 approx. top quartile 0 In percent 0.0 8 -1.0 -1 6 -2.0 -2 4 -3.0 -3 2 -4.0 -5.0 -4 0 2014 2015 2016 2017 2018 2019 2020 2021 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 More Baseline Multiplier = 0.2 Multiplier = 0.4 Multiplier = 0.6 Multiplier = 0.8 1/ Data cover Fund-supported programs for LICs (excluding emergency financing) approved since 1/ Bars refer to annual projected fiscal adjustment (right-hand side scale) and lines show 1990. The size of 3-year adjustment from program inception is found on the horizontal axis; the possible real GDP growth paths under different fiscal multipliers (left-hand side scale). 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) 34 1.0 32 30 0.8 28 26 0.6 24 22 0.4 20 18 0.2 16 14 0.0 12 Historical Projected (Prev. DSA) Projected (Curr. DSA) 10 -0.2 8 6 -0.4 4 2 0 -0.6 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Gov. Invest. - Curr. DSA Contribution of other factors Priv. Invest. - Curr. DSA Contribution of government capital 6 Table 1. Haiti: External Debt Sustainability Framework, Baseline Scenario, 2017–40 (In percent of GDP, unless otherwise indicated) Actual Projections Average 8/ Historical Projections 2017 2018 2019 2020 2021 2022 2023 2024 2025 2030 2040 External debt (nominal) 1/ 24.2 23.5 27.4 28.0 25.8 23.8 22.9 22.5 22.4 30.8 55.8 20.1 25.2 Definition of external/domestic debt Residency-based of which: public and publicly guaranteed (PPG) 24.2 23.5 27.4 28.0 25.8 23.8 22.9 22.5 22.4 30.8 55.8 20.1 25.2 No Is there a material difference between the two criteria? Change in external debt -3.2 -0.7 3.9 0.6 -2.2 -2.0 -0.9 -0.4 -0.1 2.4 0.2 Identified net debt-creating flows -4.9 -0.4 3.1 4.3 -1.2 -1.3 -0.4 0.2 0.8 0.6 0.8 1.6 0.5 Non-interest current account deficit 0.8 3.7 1.2 3.4 0.3 0.2 1.2 1.8 2.3 2.4 2.3 3.6 2.0 Deficit in balance of goods and services 36.0 40.3 41.5 36.9 36.5 36.8 36.4 35.9 35.5 36.0 35.8 37.8 36.2 Exports 19.8 18.4 18.2 14.8 15.7 15.6 15.5 15.4 15.4 14.9 15.1 Imports 55.8 58.7 59.7 51.8 52.2 52.3 51.8 51.4 50.8 50.8 50.8 Debt Accumulation 7.0 36 Net current transfers (negative = inflow) -34.3 -35.9 -39.5 -33.0 -35.3 -35.7 -34.4 -33.3 -32.3 -32.5 -31.8 -33.6 -33.4 of which: official -4.6 -4.0 -2.1 -2.2 -3.8 -3.0 -3.8 -4.6 -4.9 -4.8 -4.6 6.0 35 Other current account flows (negative = net inflow) -0.9 -0.7 -0.8 -0.5 -0.8 -0.8 -0.8 -0.8 -0.8 -1.0 -1.6 -0.7 -0.8 Net FDI (negative = inflow) -4.5 -1.1 -0.9 -0.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.8 -1.8 -1.8 -1.6 5.0 34 Endogenous debt dynamics 2/ -1.2 -2.9 2.8 1.3 -0.1 0.0 0.0 -0.1 -0.1 0.0 0.3 Contribution from nominal interest rate 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.4 1.0 4.0 33 Contribution from real GDP growth -0.3 -0.3 0.3 1.1 -0.3 -0.2 -0.3 -0.3 -0.3 -0.4 -0.8 3.0 32 Contribution from price and exchange rate changes -1.1 -2.8 2.3 … … … … … … … … Residual 3/ 1.7 -0.3 0.8 -3.6 -0.9 -0.7 -0.5 -0.6 -0.8 1.8 -0.6 -0.7 -0.2 2.0 31 of which: exceptional financing -1.7 -0.9 -1.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 30 Sustainability indicators 0.0 29 PV of PPG external debt-to-GDP ratio ... ... 16.1 17.1 16.2 15.2 14.9 14.9 15.1 21.6 41.1 PV of PPG external debt-to-exports ratio ... ... 88.6 115.5 103.5 97.8 96.6 96.4 98.3 145.1 273.3 -1.0 28 PPG debt service-to-exports ratio 5.7 6.1 7.3 9.2 8.9 8.8 8.6 8.4 8.2 11.6 19.8 2020 2022 2024 2026 2028 2030 PPG debt service-to-revenue ratio 8.0 8.6 12.3 13.5 12.3 10.6 9.9 9.2 8.8 11.5 19.6 Gross external financing need (Million of U.S. dollars) -210.9 356.4 142.3 368.7 22.8 8.4 95.6 153.2 215.3 253.7 462.6 Rate of Debt Accumulation Grant-equivalent financing (% of GDP) Key macroeconomic assumptions Grant element of new borrowing (% right scale) Real GDP growth (in percent) 1.2 1.5 -1.2 -4.0 1.2 1.0 1.1 1.2 1.4 1.4 1.4 1.4 0.8 GDP deflator in US dollar terms (change in percent) 4.2 13.2 -8.7 2.9 2.0 2.6 2.5 2.4 2.4 0.4 0.4 1.7 1.4 Effective interest rate (percent) 4/ 0.7 1.0 0.9 0.8 0.9 0.9 0.9 1.0 1.1 1.6 1.9 0.5 1.1 External debt (nominal) 1/ Growth of exports of G&S (US dollar terms, in percent) 3.2 6.9 -10.9 -19.5 9.1 2.9 2.9 3.5 3.2 1.8 2.4 4.9 0.6 of which: Private Growth of imports of G&S (US dollar terms, in percent) 11.7 20.9 -8.3 -14.4 4.1 3.8 2.7 2.7 2.7 1.8 1.8 7.6 0.9 35 Grant element of new public sector borrowing (in percent) ... ... ... 35.4 35.4 30.7 30.7 30.7 30.7 30.7 ... 31.6 Government revenues (excluding grants, in percent of GDP) 14.0 13.0 10.8 10.2 11.4 12.9 13.4 14.0 14.4 14.9 15.2 12.9 13.6 30 Aid flows (in Million of US dollars) 5/ 1186.1 -2965.9 -6672.2 253.1 380.0 314.8 359.4 458.0 502.1 534.9 607.9 Grant-equivalent financing (in percent of GDP) 6/ ... ... ... 2.9 4.0 3.2 4.2 5.1 5.5 6.1 5.5 ... 4.9 25 Grant-equivalent financing (in percent of external financing) 6/ ... ... ... 67.3 92.4 92.3 81.6 81.6 79.9 67.9 72.3 ... 77.9 Nominal GDP (Million of US dollars) 8,409 9,658 8,708 8,601 8,875 9,196 9,531 9,879 10,258 11,088 13,205 20 Nominal dollar GDP growth 5.4 14.9 -9.8 -1.2 3.2 3.6 3.6 3.6 3.8 1.8 1.8 3.1 2.2 15 Memorandum items: 10 PV of external debt 7/ ... ... 16.1 17.1 16.2 15.2 14.9 14.9 15.1 21.6 41.1 In percent of exports ... ... 88.6 115.5 103.5 97.8 96.6 96.4 98.3 145.1 273.3 5 Total external debt service-to-exports ratio 5.7 6.1 7.3 9.2 8.9 8.8 8.6 8.4 8.2 11.6 19.8 PV of PPG external debt (in Million of US dollars) 1406.0 1474.9 1441.5 1401.0 1423.8 1471.2 1548.0 2390.7 5433.7 0 (PVt-PVt-1)/GDPt-1 (in percent) 0.8 -0.4 -0.5 0.2 0.5 0.8 2.2 1.2 2020 2022 2024 2026 2028 2030 Non-interest current account deficit that stabilizes debt ratio 4.0 4.4 -2.7 2.8 2.5 2.2 2.1 2.2 2.4 0.0 2.1 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. 7 Table 2. Haiti: 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/ 38.3 39.9 47.7 51.9 49.9 48.6 47.3 46.8 46.6 53.6 70.9 35.6 49.5 Definition of Residency- of which: external debt 24.2 23.5 27.4 28.0 25.8 23.8 22.9 22.5 22.4 30.8 55.8 20.1 25.2 external/domestic debt based of which: local-currency denominated Change in public sector debt -2.5 1.6 7.7 4.3 -2.0 -1.3 -1.2 -0.5 -0.2 1.3 1.7 Is there a material Identified debt-creating flows -5.4 0.5 4.8 3.0 -1.7 -1.0 -1.0 -0.3 0.0 1.5 1.7 2.2 0.6 difference between the two No Primary deficit 0.7 2.6 3.0 6.1 3.6 3.5 3.2 3.3 3.3 2.8 2.2 3.4 3.5 criteria? Revenue and grants 17.7 17.3 12.1 12.4 15.2 15.9 17.2 18.7 19.2 19.7 19.8 19.1 17.9 of which: grants 3.7 4.3 1.4 2.2 3.8 3.0 3.8 4.6 4.9 4.8 4.6 Public sector debt 1/ Primary (noninterest) expenditure 18.4 19.9 15.2 18.4 18.7 19.4 20.4 22.0 22.5 22.6 21.9 22.5 21.4 Automatic debt dynamics -6.0 -2.1 1.8 -3.0 -5.3 -4.6 -4.1 -3.6 -3.2 -1.3 -0.5 of which: local-currency denominated Contribution from interest rate/growth differential -2.1 -2.3 -2.1 -2.1 -4.8 -4.2 -3.8 -3.3 -3.0 -1.8 -1.3 of which: foreign-currency denominated of which: contribution from average real interest rate -1.6 -1.7 -2.5 -4.1 -4.2 -3.7 -3.2 -2.8 -2.3 -1.1 -0.4 of which: contribution from real GDP growth -0.5 -0.6 0.5 2.0 -0.6 -0.5 -0.5 -0.6 -0.6 -0.7 -1.0 60 Contribution from real exchange rate depreciation -4.0 0.2 3.8 ... ... ... ... ... ... ... ... 50 Other identified debt-creating flows 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Privatization receipts (negative) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 40 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 30 Debt relief (HIPC and other) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 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 20 Residual 2.9 1.1 3.0 0.3 -0.8 -0.7 -0.6 -0.5 -0.5 0.3 0.9 -0.7 -0.2 10 Sustainability indicators 0 PV of public debt-to-GDP ratio 2/ ... ... 38.2 42.5 41.3 40.8 40.0 39.7 39.7 44.7 56.9 2020 2022 2024 2026 2028 2030 PV of public debt-to-revenue and grants ratio … … 314.5 343.7 272.5 256.5 232.4 212.7 206.4 226.4 287.6 Debt service-to-revenue and grants ratio 3/ 72.6 73.1 121.7 152.0 139.5 137.0 132.2 122.3 119.8 123.3 80.6 Gross financing need 4/ 13.5 15.2 17.8 24.8 24.7 25.3 25.9 26.1 26.3 27.2 18.1 of which: held by residents of which: held by non-residents Key macroeconomic and fiscal assumptions 60 Real GDP growth (in percent) 1.2 1.5 -1.2 -4.0 1.2 1.0 1.1 1.2 1.4 1.4 1.4 1.4 0.8 Average nominal interest rate on external debt (in percent) 0.7 0.9 1.0 0.9 0.9 0.9 0.9 1.0 1.1 1.6 1.9 0.6 1.2 50 Average real interest rate on domestic debt (in percent) -11.2 -10.6 -13.4 -17.7 -16.6 -14.5 -12.5 -10.7 -9.1 -4.1 -2.9 -6.7 -9.6 40 Real exchange rate depreciation (in percent, + indicates depreciation) -14.7 0.8 16.3 … ... ... ... ... ... ... ... 1.3 ... 30 Inflation rate (GDP deflator, in percent) 13.4 12.8 17.3 22.2 21.3 18.3 15.3 12.9 10.9 5.0 5.0 9.2 11.8 Growth of real primary spending (deflated by GDP deflator, in percent) -4.8 9.5 -24.6 16.6 3.0 4.7 6.1 9.0 4.0 0.9 1.2 -0.4 4.6 20 Primary deficit that stabilizes the debt-to-GDP ratio 5/ 3.1 0.9 -4.7 1.8 5.6 4.9 4.4 3.8 3.5 1.5 0.5 -0.2 3.0 10 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 2020 2022 2024 2026 2028 2030 Sources: Country authorities; and staff estimates and projections. 1/ Coverage of debt: The general government. 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. 8 Table 3. Haiti: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2020–40 Projections 1/ 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 PV of debt-to GDP ratio Baseline 17 16 15 15 15 15 15 16 18 20 22 24 26 28 31 34 36 39 40 41 41 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 17 18 19 21 22 23 24 25 27 29 31 33 36 38 41 43 45 47 48 48 48 0 #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #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 17 17 17 16 16 17 17 18 20 22 24 26 29 31 34 37 40 43 44 45 45 B2. Primary balance 17 16 16 15 16 16 16 18 19 21 23 25 27 30 32 35 37 40 41 42 42 B3. Exports 17 18 19 19 19 19 20 21 22 24 26 27 30 32 34 37 39 42 43 43 43 B4. Other flows 3/ 17 23 28 28 28 28 29 30 31 32 33 35 37 39 40 42 44 46 47 47 46 B5. Depreciation 17 21 12 12 12 12 12 13 15 18 21 24 27 31 34 38 42 45 48 49 50 B6. Combination of B1-B5 17 22 26 26 26 26 27 28 29 30 32 34 35 38 40 42 44 46 47 47 47 C. Tailored Tests C1. Combined contingent liabilities 17 17 16 16 16 16 17 18 20 22 24 26 28 31 33 36 39 41 43 43 44 C2. Natural disaster 17 18 18 19 19 20 21 23 25 27 29 32 34 37 40 43 46 49 51 51 52 C3. Commodity price n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 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. 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 40 40 40 40 40 40 40 40 40 40 PV of debt-to-exports ratio Baseline 116 104 98 97 96 98 104 111 121 133 145 159 174 192 209 227 243 258 268 272 273 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 116 116 124 133 141 148 162 171 182 196 210 224 240 256 273 288 302 315 323 324 322 0 116 93 78 68 59 52 48 44 43 46 49 54 60 66 72 78 83 86 85 80 74 B. Bound Tests B1. Real GDP growth 116 104 98 97 96 98 104 111 121 133 145 159 174 192 209 227 243 258 268 272 273 B2. Primary balance 116 104 100 100 101 104 110 118 128 141 153 167 182 199 217 234 250 265 275 278 279 B3. Exports 116 133 159 158 158 161 170 179 190 205 219 235 253 274 295 316 335 353 364 367 366 B4. Other flows 3/ 116 144 182 182 182 185 195 202 209 217 225 235 246 259 273 286 297 307 312 312 307 B5. Depreciation 116 104 61 59 59 60 64 70 81 95 108 124 141 161 180 200 218 236 248 254 257 B6. Combination of B1-B5 116 151 160 183 183 186 196 204 212 223 234 246 260 276 293 309 323 337 344 344 341 C. Tailored Tests C1. Combined contingent liabilities 116 106 102 103 104 107 114 122 133 146 158 173 189 206 225 242 259 275 285 289 290 C2. Natural disaster 116 116 118 123 128 134 145 156 170 186 201 217 235 256 276 296 314 332 344 350 352 C3. Commodity price n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 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. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Threshold 180 180 180 180 180 180 180 180 180 180 180 180 180 180 180 180 180 180 180 180 180 Debt service-to-exports ratio Baseline 9 9 9 9 8 8 10 10 10 11 12 11 12 13 15 16 17 18 19 19 20 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 9 9 9 9 9 9 11 12 13 14 15 15 16 18 19 21 22 23 23 24 24 0 9 8 8 7 6 6 7 5 4 3 2 0 0 -1 -1 -1 -1 -1 -2 -2 -2 B. Bound Tests B1. Real GDP growth 9 9 9 9 8 8 10 10 10 11 12 11 12 13 15 16 17 18 19 19 20 B2. Primary balance 9 9 9 9 8 8 10 10 11 11 12 12 13 14 15 17 18 19 19 20 21 B3. Exports 9 10 12 12 12 11 14 15 16 17 18 17 19 20 22 24 25 26 27 28 28 B4. Other flows 3/ 9 9 10 11 10 10 12 15 18 19 20 19 20 21 22 24 25 25 26 26 26 B5. Depreciation 9 9 9 8 7 7 9 9 6 7 8 8 9 10 11 13 14 15 16 16 17 B6. Combination of B1-B5 9 10 11 12 11 11 13 16 19 19 20 19 20 22 23 25 26 27 27 28 28 C. Tailored Tests C1. Combined contingent liabilities 9 9 9 9 9 8 10 10 10 11 12 11 12 14 15 16 18 18 19 20 20 C2. Natural disaster 9 9 9 9 9 9 11 11 11 12 13 13 14 15 16 18 19 20 21 21 22 C3. Commodity price n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 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. 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 15 15 15 15 15 15 15 15 15 15 Debt service-to-revenue ratio Baseline 13 12 11 10 9 9 10 10 10 11 12 11 12 13 14 16 17 18 19 19 20 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 13 12 11 11 10 10 12 12 13 14 15 15 16 17 19 20 22 22 23 24 24 0 13 12 9 8 7 6 7 5 4 3 2 0 0 -1 -1 -1 -1 -1 -2 -2 -2 B. Bound Tests B1. Real GDP growth 13 13 12 11 10 10 11 11 11 12 13 12 13 14 16 18 19 20 20 21 22 B2. Primary balance 13 12 11 10 9 9 10 10 11 11 12 12 13 14 15 17 18 19 19 20 20 B3. Exports 13 12 11 11 10 10 11 12 13 13 14 14 15 16 17 18 20 20 21 21 22 B4. Other flows 3/ 13 12 12 12 11 11 12 15 18 19 19 19 20 21 22 23 24 25 25 26 26 B5. Depreciation 13 16 14 11 11 10 12 12 8 9 10 10 11 12 14 16 18 19 20 21 21 B6. Combination of B1-B5 13 13 12 12 11 11 12 15 17 18 18 18 19 20 21 22 24 24 25 25 26 C. Tailored Tests C1. Combined contingent liabilities 13 12 11 10 9 9 10 10 10 11 12 11 12 13 15 16 17 18 19 19 20 C2. Natural disaster 13 12 11 10 10 9 11 11 11 12 13 12 13 14 15 17 18 19 20 20 21 C3. Commodity price n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 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. 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 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. 9 Table 4. Haiti: Sensitivity Analysis for Key Indicators of Public Debt, 2020–40 Projections 1/ 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 PV of Debt-to-GDP Ratio Baseline 42 41 41 40 40 40 40 42 43 44 45 46 46 47 48 49 50 51 53 55 57 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 42 45 48 49 50 50 49 49 48 47 46 45 45 45 44 44 44 45 45 47 48 0 #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #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 42 44 46 47 47 48 50 52 54 56 57 59 60 62 63 65 66 68 71 73 76 B2. Primary balance 42 44 45 44 43 43 43 45 46 46 47 47 48 49 50 51 51 53 54 56 58 B3. Exports 42 43 45 44 44 44 44 46 47 48 48 49 50 50 51 52 53 54 55 57 59 B4. Other flows 3/ 42 48 55 54 53 53 54 56 57 57 57 57 57 58 58 58 58 59 60 61 62 B5. Depreciation 42 42 41 39 38 37 37 38 38 38 37 38 37 38 37 38 38 38 39 41 42 B6. Combination of B1-B5 42 42 42 39 39 39 40 41 43 43 44 45 46 47 47 48 49 50 52 54 56 C. Tailored Tests C1. Combined contingent liabilities 42 48 47 45 44 44 44 46 47 47 48 48 49 50 51 52 53 54 56 58 60 C2. Natural disaster 42 66 63 60 58 56 56 57 57 57 58 58 59 60 61 62 63 64 66 68 70 C3. Commodity price n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 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. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Public debt benchmark 55 55 55 55 55 55 55 55 55 55 55 55 55 55 55 55 55 55 55 55 55 PV of Debt-to-Revenue Ratio Baseline 344 273 256 232 213 206 209 217 220 223 226 231 235 239 244 248 253 259 268 278 288 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 344 292 290 269 247 238 237 236 232 228 226 225 225 225 226 228 230 234 239 247 254 0 152 100 103 109 116 123 129 132 134 133 128 122 118 112 106 99 93 88 85 87 93 B. Bound Tests B1. Real GDP growth 344 285 286 265 247 244 251 263 270 276 283 290 298 306 313 321 328 337 349 362 375 B2. Primary balance 344 287 283 254 230 222 223 229 231 233 236 240 244 248 252 256 260 266 274 284 294 B3. Exports 344 283 283 256 235 228 231 238 241 243 245 248 252 255 258 262 265 271 278 287 296 B4. Other flows 3/ 344 317 343 312 286 278 281 288 288 288 288 289 290 291 292 293 294 297 302 308 314 B5. Depreciation 344 284 260 230 209 197 193 200 196 196 192 194 191 193 191 194 194 196 202 209 216 B6. Combination of B1-B5 344 276 262 229 210 204 206 214 217 220 223 227 232 236 240 245 249 256 264 274 284 C. Tailored Tests C1. Combined contingent liabilities 344 317 294 263 238 228 229 235 237 239 241 245 249 253 257 261 266 272 281 291 301 C2. Natural disaster 344 436 396 348 309 291 287 290 289 289 291 293 297 301 305 310 315 322 332 343 354 C3. Commodity price n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 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. 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 152 140 137 132 122 120 122 127 129 128 123 117 113 107 99 92 84 77 72 73 81 A. Alternative Scenarios A1. Key variables at their historical averages in 2020-2030 2/ 152 151 158 158 148 146 149 150 149 143 134 124 115 106 95 85 76 67 61 61 65 0 152 100 103 109 116 123 129 132 134 133 128 122 118 112 106 99 93 88 85 87 93 B. Bound Tests B1. Real GDP growth 152 144 150 150 143 143 148 156 160 161 157 153 149 144 137 130 123 116 112 114 123 B2. Primary balance 152 140 149 153 138 132 132 135 136 134 128 122 117 111 103 95 88 80 75 77 84 B3. Exports 152 140 137 133 123 120 122 128 131 130 125 119 115 109 101 93 86 79 74 75 82 B4. Other flows 3/ 152 140 138 134 124 121 124 130 135 134 129 123 119 113 105 97 90 82 77 79 86 B5. Depreciation 152 133 131 123 111 114 113 115 123 118 117 107 107 97 94 82 80 72 68 68 75 B6. Combination of B1-B5 152 137 136 131 121 119 121 126 128 127 122 117 112 106 99 91 84 76 72 73 80 C. Tailored Tests C1. Combined contingent liabilities 152 140 173 160 143 137 136 138 138 136 130 123 117 111 103 95 87 79 74 75 82 C2. Natural disaster 152 141 269 234 200 183 175 171 167 161 151 142 135 126 117 108 100 91 86 86 93 C3. Commodity price n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 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. 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. 10