INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL MONETARY FUND RWANDA 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) Rwanda: Joint Bank-Fund Debt Sustainability Analysis Update 1 Risk of external debt distress Low Overall risk of debt distress Low Application of judgment No Rwanda’s public debt is sustainable and remains at a low risk of external and overall debt distress. The DSA covers the central government as well as guarantees and debt held by all state-owned enterprises. This DSA is based on the baseline of the most recent DSA, published in July 2019, which will be updated in the next full DSA. A customized stress test to the most recent DSA is introduced to approximate the impact of the COVID-19 Pandemic on Rwanda’s economy. 2 In this scenario, main macro variables such as real GDP growth and the primary balance in percent of GDP are shocked by -2.6 and -3.2 percentage points in 2020, respectively, compared to the baseline in the previous DSA. Exports are shocked by a significantly larger magnitude of -9.7 percentage points, to reflect lower receipts from tourism and goods exports due to weakening global demand. This produces a one-off breach to the PV of debt-to-exports ratio in 2020. All other external and public debt burden indicators remain under their respective thresholds under the baseline and stress tests, except for one-off breaches in the external debt service indicators in 2023 when the Eurobond issued in 2013 matures. These single one-year breaches are automatically discounted from the analysis according to the LIC-DSF guidance note. The current macroeconomic framework reflects currently available information. However, updates with respect to the economic impact and policy response to the COVID-19 crisis are rapidly evolving and risks are heavily tilted to the downside. 1 Based on the previous DSA in the Staff Report for the 2019 Article IV Consultation and Request for a Three-Year Policy Coordination Instrument (Country Report No. 19/211). 2 The COVID-19 Pandemic scenario is based on the projection described in the Staff Report, while other scenarios, including the baseline in this Annex, are based on the previous DSA. Annex Figure 1. Rwanda: Indicators of Public and Publicly Guaranteed External Debt Under Alternatives Scenarios, 2019‒29 1/ 2/ PV of debt-to GDP ratio PV of debt-to-exports ratio 60 300 50 250 40 200 30 150 20 100 10 50 Most extreme shock is One-time depreciation Most extreme shock is Exports 0 0 2019 2021 2023 2025 2027 2029 2019 2021 2023 2025 2027 2029 Debt service-to-exports ratio Debt service-to-revenue ratio 30 35 30 25 25 20 20 15 15 10 10 5 A one-off breach excluded: Exports 5 Most extreme shock is Primary Balance Most extreme shock is One-time depreciation 0 0 2019 2021 2023 2025 2027 2029 2019 2021 2023 2025 2027 2029 Baseline Historical scenario Most extreme shock 1/ Threshold COVID-19 Pandemic 3/ Stress test with (the largest) one-off breach 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 Yes Avg. nominal interest rate on new borrowing in USD 1.8% 1.8% Natural Disasters n.a. n.a. USD Discount rate 5.0% 5.0% Commodity Prices 2/ n.a. n.a. Avg. maturity (incl. grace period) 29 29 Market Financing No No Avg. grace period 6 6 Note: "Yes" indicates any change to the size or * Note: All the additional financing needs generated by the shocks under the stress tests are interactions of the default settings for the stress tests. assumed to be covered by PPG external MLT debt in the external DSA. Default terms of marginal "n.a." indicates that the 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 2029. 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/ COVID-19 Pandemic scenario is the customized shocks approximating the stress event and their impact captured in the Staff Report, while other scenarios are based on the baseline in the previous DSA (Country Report No. 19/211). 2 Annex Figure 2. Rwanda: Indicators of Public Debt Under Alternative Scenarios, 2019‒29 1/ PV of Debt-to-GDP Ratio 80 70 60 50 40 30 20 Most extreme shock is Growth 10 0 2019 2021 2023 2025 2027 2029 PV of Debt-to-Revenue Ratio Debt Service-to-Revenue Ratio 300 50 45 250 40 35 200 30 150 25 20 100 15 10 50 Most extreme shock is Growth Most extreme shock is Growth 5 0 0 2019 2021 2023 2025 2027 2029 2019 2021 2023 2025 2027 2029 Baseline Most extreme shock 1/ Public debt benchmark Historical scenario COVID-19 Pandemic 2/ Borrowing Assumptions for Stress Tests* Default User defined Shares of marginal debt External PPG medium and long-term 58% 58% Domestic medium and long-term 15% 15% Domestic short-term 27% 27% Terms of marginal debt External MLT debt Avg. nominal interest rate on new borrowing in USD 1.8% 1.8% Avg. maturity (incl. grace period) 29 29 Avg. grace period 6 6 Domestic MLT debt Avg. real interest rate on new borrowing 5.5% 5.5% Avg. maturity (incl. grace period) 3 3 Avg. grace period 2 2 Domestic short-term debt Avg. real interest rate 1% 1.0% * 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 2029. 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/ COVID-19 Pandemic scenario is the customized shocks approximating the stress event and their impact captured in the Staff Report, while other scenarios are based on the baseline in the previous DSA (Country Report No. 19/211). 3 Annex Table 1. Rwanda: External Debt Sustainability Framework, Baseline Scenario, 2016–39 (In percent of GDP, unless otherwise indicated) Actual Projections Average 8/ Historical Projections 2016 2017 2018 2019 2020 2021 2022 2023 2024 2029 2039 External debt (nominal) 1/ 43.8 46.4 50.0 51.3 53.0 54.3 54.8 55.3 56.6 61.8 69.9 29.6 56.7 Definition of external/domestic debt Currency-based of which: public and publicly guaranteed (PPG) 35.0 37.9 41.6 43.4 44.6 45.5 45.6 45.8 46.7 49.6 50.7 24.7 46.8 Is there a material difference between the No two criteria? Change in external debt 14.0 2.6 3.6 1.3 1.7 1.3 0.5 0.6 1.2 0.9 1.0 Identified net debt-creating flows 12.7 1.8 3.0 3.0 2.7 1.8 2.3 1.8 1.5 0.2 -1.6 5.5 1.6 Non-interest current account deficit 14.6 6.4 6.4 8.1 8.0 6.6 6.7 6.1 6.0 5.9 4.8 8.8 6.5 Deficit in balance of goods and services 18.5 10.8 11.2 12.4 11.4 9.6 9.8 9.1 8.7 7.3 5.4 16.0 9.2 Exports 18.1 21.7 21.4 21.2 21.4 22.1 22.1 22.7 23.0 26.1 32.6 Imports 36.6 32.5 32.7 33.6 32.8 31.8 32.0 31.7 31.7 33.4 38.0 Debt Accumulation 8.0 50 Net current transfers (negative = inflow) -6.2 -6.5 -6.9 -6.7 -5.7 -5.3 -5.2 -4.8 -4.6 -3.8 -3.1 -8.4 -4.8 of which: official -6.6 -6.6 -6.6 -6.5 -5.6 -5.0 -5.0 -4.5 -4.1 -2.6 -1.1 7.0 45 Other current account flows (negative = net inflow) 2.3 2.1 2.1 2.3 2.3 2.2 2.1 1.8 1.9 2.4 2.6 1.3 2.1 40 Net FDI (negative = inflow) -2.6 -2.8 -3.0 -2.9 -2.8 -2.1 -1.8 -1.9 -2.1 -3.2 -4.5 -2.6 -2.5 6.0 Endogenous debt dynamics 2/ 0.7 -1.8 -0.3 -2.2 -2.4 -2.6 -2.6 -2.5 -2.4 -2.4 -1.9 35 Contribution from nominal interest rate 1.3 1.4 1.5 1.4 1.4 1.4 1.4 1.3 1.4 1.6 2.2 5.0 30 Contribution from real GDP growth -1.7 -2.5 -3.8 -3.6 -3.8 -4.0 -4.0 -3.7 -3.8 -4.0 -4.1 4.0 25 Contribution from price and exchange rate changes 1.1 -0.7 2.0 … … … … … … … … Residual 3/ 1.3 0.8 0.6 -1.7 -1.1 -0.5 -1.8 -1.2 -0.3 0.7 2.6 -2.0 -0.5 3.0 20 of which: exceptional financing 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 15 2.0 10 Sustainability indicators 1.0 5 PV of PPG external debt-to-GDP ratio ... ... 29.0 29.4 29.6 29.4 29.6 29.9 30.7 33.0 34.6 PV of PPG external debt-to-exports ratio ... ... 135.2 138.4 138.0 132.9 133.6 132.1 133.4 126.2 106.1 0.0 0 PPG debt service-to-exports ratio 6.3 7.2 7.8 9.0 10.5 13.0 8.4 19.3 7.2 7.0 11.3 2019 2021 2023 2025 2027 2029 PPG debt service-to-revenue ratio 6.2 8.6 8.6 10.5 12.3 15.8 10.1 23.6 8.9 9.3 16.6 Gross external financing need (Billion of U.S. dollars) 1.2 0.6 0.6 0.9 1.0 1.1 1.1 1.5 1.2 1.7 4.4 Rate of Debt Accumulation Grant-equivalent financing (% of GDP) Key macroeconomic assumptions Grant element of new borrowing (% right scale) Real GDP growth (in percent) 6.0 6.1 8.6 7.8 8.1 8.2 8.0 7.5 7.5 7.2 6.5 7.1 7.6 GDP deflator in US dollar terms (change in percent) -3.6 1.6 -4.2 -0.4 0.2 0.5 1.3 2.0 2.0 2.0 2.0 -0.2 1.4 Effective interest rate (percent) 4/ 4.5 3.4 3.3 3.1 2.9 2.8 2.8 2.6 2.8 2.9 3.5 3.1 2.8 External debt (nominal) 1/ Growth of exports of G&S (US dollar terms, in percent) 4.4 29.0 3.0 6.2 9.3 12.4 9.3 12.3 11.3 11.6 11.6 14.0 11.1 of which: Private Growth of imports of G&S (US dollar terms, in percent) 2.4 -4.4 4.8 10.5 5.6 5.4 10.0 8.8 9.4 9.9 10.7 9.3 9.3 60 Grant element of new public sector borrowing (in percent) ... ... ... 46.4 44.4 42.7 40.4 24.3 36.7 38.7 28.9 ... 39.6 Government revenues (excluding grants, in percent of GDP) 18.4 18.1 19.3 18.3 18.2 18.2 18.4 18.6 18.8 19.7 22.3 16.1 18.8 50 Aid flows (in Billion of US dollars) 5/ 0.7 0.8 1.1 0.9 0.8 0.9 0.8 0.8 0.9 1.3 2.1 Grant-equivalent financing (in percent of GDP) 6/ ... ... ... 7.3 6.6 6.2 5.8 5.6 5.5 4.5 3.1 ... 5.6 40 Grant-equivalent financing (in percent of external financing) 6/ ... ... ... 71.4 66.4 62.3 64.5 48.3 60.2 56.5 38.6 ... 61.0 Nominal GDP (Billion of US dollars) 8 9 10 10 11 12 13 14 16 25 59 Nominal dollar GDP growth 2.2 7.8 4.1 7.4 8.3 8.7 9.4 9.6 9.6 9.3 8.6 6.9 9.1 30 Memorandum items: 20 PV of external debt 7/ ... ... 37.4 37.3 37.9 38.2 38.7 39.4 40.6 45.2 53.8 In percent of exports ... ... 174.2 175.9 177.1 172.5 175.0 174.1 176.4 173.0 165.1 10 Total external debt service-to-exports ratio 12.7 13.2 15.4 16.6 17.5 20.1 15.9 26.9 15.0 15.4 21.9 PV of PPG external debt (in Billion of US dollars) 2.8 3.0 3.3 3.5 3.9 4.3 4.9 8.2 20.3 0 (PVt-PVt-1)/GDPt-1 (in percent) 2.5 2.7 2.4 2.9 3.2 3.7 3.4 3.1 2019 2021 2023 2025 2027 2029 Non-interest current account deficit that stabilizes debt ratio 0.6 3.8 2.8 6.8 6.3 5.3 6.2 5.6 4.7 4.9 3.8 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)]/(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. 4 Annex Table 2. Rwanda: Public Sector Debt Sustainability Framework, Baseline Scenario, 2016–39 (In percent of GDP, unless otherwise indicated) Actual Projections Average 6/ 2016 2017 2018 2019 2020 2021 2022 2023 2024 2029 2039 Historical Projections Public sector debt 1/ 44.2 48.9 53.1 55.8 57.3 58.2 57.2 56.7 56.5 58.4 62.8 32.4 57.2 Definition of external/domestic Currency- of which: external debt 35.0 37.9 41.6 43.4 44.6 45.5 45.6 45.8 46.7 49.6 50.7 24.7 46.8 debt based of which: local-currency denominated Change in public sector debt 8.8 4.6 4.2 2.7 1.5 0.9 -0.9 -0.6 -0.1 0.5 0.4 Is there a material difference Identified debt-creating flows 2.3 0.4 2.9 2.7 1.6 1.1 -0.6 -0.4 0.0 0.4 0.4 1.3 0.6 No between the two criteria? Primary deficit 2.7 3.6 3.5 4.9 5.0 4.8 3.6 3.6 4.1 4.3 3.8 2.6 4.3 Revenue and grants 23.5 22.9 24.1 23.1 22.2 21.6 22.0 22.2 22.1 22.0 23.4 24.0 22.1 of which: grants 5.1 4.7 4.9 4.8 3.9 3.4 3.6 3.7 3.4 2.3 1.1 Public sector debt 1/ Primary (noninterest) expenditure 26.2 26.5 27.6 28.0 27.2 26.4 25.6 25.8 26.3 26.3 27.2 26.6 26.5 Automatic debt dynamics -0.4 -3.1 -0.6 -2.3 -3.4 -3.7 -4.3 -4.0 -3.9 -3.8 -3.4 of which: local-currency denominated Contribution from interest rate/growth differential -1.7 -2.2 -3.0 -3.5 -4.1 -4.2 -4.2 -4.0 -3.9 -3.8 -3.5 of which: foreign-currency denominated of which: contribution from average real interest rate 0.3 0.4 0.8 0.4 0.1 0.1 0.1 0.0 0.1 0.0 0.4 of which: contribution from real GDP growth -2.0 -2.6 -3.9 -3.8 -4.2 -4.3 -4.3 -4.0 -4.0 -3.9 -3.8 70 Contribution from real exchange rate depreciation 1.3 -1.0 2.4 ... ... ... ... ... ... ... ... 60 Other identified debt-creating flows 0.0 -0.1 0.0 0.0 0.0 0.0 0.0 0.0 -0.2 0.0 0.0 -0.1 -0.1 50 Privatization receipts (negative) 0.0 -0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 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 40 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 30 Other debt creating or reducing flow (use of earmarked fund) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.2 0.0 0.0 20 Residual 6.4 4.2 1.3 1.3 0.6 0.3 -0.3 -0.2 -0.2 0.1 0.1 2.1 0.1 10 Sustainability indicators 0 PV of public debt-to-GDP ratio 2/ ... ... 41.1 42.5 42.9 42.7 41.6 41.2 41.0 42.2 47.2 2019 2021 2023 2025 2027 2029 PV of public debt-to-revenue and grants ratio … … 170.2 184.3 193.7 197.6 189.0 185.4 185.0 191.6 201.8 Debt service-to-revenue and grants ratio 3/ 28.6 29.3 29.5 17.5 23.1 32.1 30.7 39.5 27.5 26.8 34.1 Gross financing need 4/ 8.4 9.0 10.6 9.0 10.1 11.7 10.4 12.4 10.0 10.2 11.8 of which: held by residents of which: held by non-residents Key macroeconomic and fiscal assumptions 1 Real GDP growth (in percent) 6.0 6.1 8.6 7.8 8.1 8.2 8.0 7.5 7.5 7.2 6.5 7.1 7.6 Average nominal interest rate on external debt (in percent) 2.2 2.5 2.3 2.2 2.1 1.9 1.8 1.5 1.7 1.7 1.8 1.8 1.8 1 Average real interest rate on domestic debt (in percent) 0.4 -0.8 7.2 4.2 0.9 1.0 1.1 1.7 1.7 2.3 3.9 1.6 2.0 Real exchange rate depreciation (in percent, + indicates depreciation) 5.1 -2.9 6.9 … ... ... ... ... ... ... ... 1.9 ... 1 n.a. Inflation rate (GDP deflator, in percent) 5.5 7.3 -0.8 4.2 5.0 5.0 5.0 5.0 5.0 5.0 5.0 4.4 5.0 0 Growth of real primary spending (deflated by GDP deflator, in percent) -2.1 7.3 13.2 9.3 5.0 5.2 4.7 8.4 9.2 7.4 7.2 8.9 7.1 Primary deficit that stabilizes the debt-to-GDP ratio 5/ -6.0 -1.0 -0.7 2.2 3.5 3.9 4.6 4.2 4.3 3.8 3.4 -2.6 3.8 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 2019 2021 2023 2025 2027 2029 Sources: Country authorities; and staff estimates and projections. 1/ Coverage of debt: The central government plus social security and extra budgetary funds, central bank, government-guaranteed debt, non-guaranteed SOE debt. 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. 5 Annex Table 3. Rwanda: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2019‒29 (In percent) Projections 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 PV of debt-to GDP ratio Baseline 29.4 29.6 29.4 29.6 29.9 30.7 31.1 31.6 32.1 32.6 33.0 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 1/ 29.4 30.6 31.9 33.5 35.6 38.4 40.5 43.0 45.6 48.2 50.8 A2. Alternative Scenario :[COVID-19 pandemic] 3/ 29.4 32.5 31.3 30.8 30.8 31.6 32.1 33.1 33.7 34.1 34.4 B. Bound Tests B1. Real GDP growth 29.4 30.7 31.8 31.9 32.3 33.1 33.6 34.2 34.7 35.2 35.6 B2. Primary balance 29.4 30.2 31.6 31.9 32.2 33.0 33.3 33.8 34.2 34.5 34.8 B3. Exports 29.4 31.2 33.8 33.8 33.9 34.5 34.7 35.1 35.4 35.5 35.6 B4. Other flows 2/ 29.4 31.6 32.9 32.9 33.1 33.7 33.9 34.4 34.7 34.9 35.0 B6. One-time 30 percent nominal depreciation 29.4 37.4 34.0 34.4 35.0 36.1 36.7 37.6 38.3 39.1 39.8 B6. Combination of B1-B5 29.4 33.5 34.0 34.0 34.3 35.1 35.4 36.0 36.4 36.7 37.0 C. Tailored Tests C1. Combined contingent liabilities 29.4 31.4 31.7 31.9 32.4 33.1 33.4 33.9 34.4 34.7 35.0 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 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 29.4 33.0 32.9 33.0 33.4 34.3 34.7 35.3 35.9 36.4 36.8 Threshold 55 55 55 55 55 55 55 55 55 55 55 PV of debt-to-exports ratio Baseline 138.5 138.1 132.9 133.7 132.1 133.4 131.1 129.8 128.4 127.5 126.2 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 1/ 138.5 142.8 144.4 151.3 157.2 166.7 170.9 176.7 182.3 188.4 194.5 A2. Alternative Scenario :[COVID-19 pandemic] 3/ 138.6 277.9 138.6 138.0 141.8 143.1 140.3 138.1 135.2 133.0 130.8 B. Bound Tests B1. Real GDP growth 138.5 138.1 132.9 133.7 132.1 133.4 131.1 129.8 128.4 127.5 126.2 B2. Primary balance 138.5 140.8 143.0 144.0 142.2 143.3 140.4 138.5 136.5 134.9 133.1 B3. Exports 138.5 163.0 191.6 191.4 187.7 187.9 183.4 180.5 177.2 174.1 171.0 B4. Other flows 2/ 138.5 147.5 148.8 148.8 146.1 146.5 143.1 141.0 138.5 136.3 134.1 B6. One-time 30 percent nominal depreciation 138.5 138.1 121.5 122.8 122.0 124.0 122.4 121.8 121.0 120.9 120.5 B6. Combination of B1-B5 138.5 156.3 140.6 157.6 155.3 156.2 153.1 151.2 148.8 147.1 145.2 C. Tailored Tests C1. Combined contingent liabilities 138.5 146.7 143.1 144.0 142.8 144.0 141.1 139.3 137.3 135.9 134.1 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 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 138.5 138.1 132.9 133.7 132.1 133.4 131.1 129.8 128.4 127.5 126.2 Threshold 240 240 240 240 240 240 240 240 240 240 240 Debt service-to-exports ratio Baseline 9.0 10.5 13.0 8.4 19.3 7.2 6.8 6.1 6.3 6.6 7.0 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 1/ 9.0 10.6 13.5 9.1 21.2 8.4 8.2 7.6 8.3 9.1 9.9 A2. Alternative Scenario :[COVID-19 pandemic] 3/ 9.0 19.5 13.3 8.7 20.0 7.7 7.3 6.5 7.4 7.5 7.8 B. Bound Tests B1. Real GDP growth 9.0 10.5 13.0 8.4 19.3 7.2 6.8 6.1 6.3 6.6 7.0 B2. Primary balance 9.0 10.5 13.2 8.9 19.8 7.7 7.2 6.4 6.7 7.1 7.5 B3. Exports 9.0 11.8 16.6 11.2 24.8 9.6 9.0 8.0 8.6 9.4 9.9 B4. Other flows 2/ 9.0 10.5 13.2 8.8 19.7 7.6 7.1 6.3 6.9 7.3 7.7 B6. One-time 30 percent nominal depreciation 9.0 10.5 13.0 8.1 19.1 7.0 6.6 5.9 6.1 6.1 6.6 B6. Combination of B1-B5 9.0 11.1 14.8 9.6 21.8 8.3 7.8 6.9 7.5 7.8 8.2 C. Tailored Tests C1. Combined contingent liabilities 9.0 10.5 13.2 8.7 19.6 7.5 7.0 6.3 6.5 6.8 7.2 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 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 9.0 10.5 13.0 8.4 19.3 7.2 6.8 6.1 6.3 6.6 7.0 Threshold 21 21 21 21 21 21 21 21 21 21 21 Debt service-to-revenue ratio Baseline 10.5 12.3 15.8 10.2 23.6 8.9 8.5 7.7 8.2 8.7 9.3 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 1/ 10.5 12.5 16.4 10.9 25.8 10.3 10.2 9.6 10.7 11.9 13.2 A2. Alternative Scenario :[COVID-19 pandemic] 3/ 10.4 12.5 16.5 10.5 23.4 9.1 8.8 8.1 9.5 9.8 10.4 B. Bound Tests 10.4 12.5 16.5 10.5 23.4 9.1 8.8 8.1 9.5 9.8 10.4 B1. Real GDP growth 10.5 12.8 17.1 11.0 25.5 9.6 9.2 8.3 8.8 9.4 10.1 B2. Primary balance 10.5 12.3 16.1 10.7 24.1 9.4 9.0 8.2 8.7 9.3 9.9 B3. Exports 10.5 12.3 16.1 10.8 24.2 9.4 9.0 8.1 8.9 9.9 10.4 B4. Other flows 2/ 10.5 12.3 16.1 10.6 24.0 9.3 8.9 8.0 8.9 9.6 10.2 B6. One-time 30 percent nominal depreciation 10.5 15.6 20.0 12.4 29.4 10.8 10.4 9.4 10.1 10.1 11.0 B6. Combination of B1-B5 10.5 13.0 17.5 11.3 26.0 9.9 9.5 8.6 9.5 10.0 10.6 C. Tailored Tests C1. Combined contingent liabilities 10.5 12.3 16.1 10.5 23.9 9.2 8.8 8.0 8.4 8.9 9.6 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 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 10.5 12.3 15.8 10.2 23.6 8.9 8.5 7.7 8.2 8.7 9.3 Threshold 23 23 23 23 23 23 23 23 23 23 23 Sources: Country authorities; and staff estimates and projections. 1/ 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. 2/ Includes official and private transfers and FDI. 3/ COVID-19 Pandemic scenario is the customized shocks approximating the stress event and their impact captured in the Staff Report, while other scenarios are based on the baseline in the previous DSA (Country Report No. 19/211). 6 Annex Table 4. Rwanda: Sensitivity Analysis for Key Indicators of Public Debt, 2019‒29 (In percent) Projections 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 PV of Debt-to-GDP Ratio Baseline 42.5 42.9 42.7 41.6 41.2 41.0 40.9 41.2 41.4 41.8 42.2 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 1/ 43 42 41 40 39 38 38 37 37 37 36 A2. Alternative Scenario :[COVID-19 pandemic] 3/ 43 45 45 43 42 42 43 44 45 45 45 B. Bound Tests B1. Real GDP growth 43 45 48 47 48 49 49 50 51 52 54 B2. Primary balance 43 44 46 45 44 44 43 43 44 44 44 B3. Exports 43 44 47 46 45 45 44 45 45 45 45 B4. Other flows 2/ 43 45 46 45 44 44 44 44 44 44 44 B6. One-time 30 percent nominal depreciation 43 48 45 42 40 38 37 36 35 35 34 B6. Combination of B1-B5 43 42 44 42 42 42 41 41 42 42 42 C. Tailored Tests C1. Combined contingent liabilities 43 47 46 45 44 44 43 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 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 43 43 43 42 41 41 41 41 41 42 42 Public debt benchmark 70 70 70 70 70 70 70 70 70 70 70 PV of Debt-to-Revenue Ratio Baseline 184.3 193.7 197.6 189.0 185.5 185.0 185.2 186.6 188.0 189.7 191.6 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 1/ 184 189 189 179 175 171 168 167 165 164 163 A2. Alternative Scenario :[COVID-19 pandemic] 3/ 181 201 198 193 195 196 200 205 207 207 207 B. Bound Tests B1. Real GDP growth 184 202 218 213 213 216 220 225 231 236 241 B2. Primary balance 184 199 213 203 198 197 196 197 198 199 200 B3. Exports 184 201 218 208 203 202 201 202 202 203 203 B4. Other flows 2/ 184 203 214 204 200 199 198 199 200 200 201 B6. One-time 30 percent nominal depreciation 184 218 211 195 182 176 170 166 162 159 157 B6. Combination of B1-B5 184 192 202 193 189 188 187 188 189 190 192 C. Tailored Tests C1. Combined contingent liabilities 184 211 214 204 199 197 197 197 198 199 201 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 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 184 194 198 189 185 185 185 187 188 190 192 Debt Service-to-Revenue Ratio Baseline 17.5 23.1 32.1 30.7 39.5 27.5 26.3 25.0 25.3 25.8 26.8 A. Alternative Scenarios A1. Key variables at their historical averages in 2019-2039 1/ 18 23 33 32 41 29 27 26 26 27 28 A2. Alternative Scenario :[COVID-19 pandemic] 3/ 17 23 34 33 42 30 29 28 29 29 29 B. Bound Tests B1. Real GDP growth 18 24 35 35 45 33 32 31 32 33 34 B2. Primary balance 18 23 34 34 42 30 28 26 26 27 28 B3. Exports 18 23 32 31 40 28 27 25 26 27 28 B4. Other flows 2/ 18 23 32 31 40 28 27 25 26 27 28 B6. One-time 30 percent nominal depreciation 18 23 34 31 43 28 27 25 25 26 27 B6. Combination of B1-B5 18 23 32 32 40 28 27 25 26 26 27 C. Tailored Tests C1. Combined contingent liabilities 18 23 38 33 43 29 27 26 26 26 27 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 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 18 23 32 31 39 28 26 25 25 26 27 Sources: Country authorities; and staff estimates and projections. 1/ Variables include real GDP growth, GDP deflator and primary deficit in percent of GDP. 2/ Includes official and private transfers and FDI. 3/ COVID-19 Pandemic scenario is the customized shocks approximating the stress event and their impact captured in the Staff Report, while other scenarios are based on the baseline in the previous DSA (Country Report No. 19/211). 7