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Guinea - Joint World Bank-IMF Debt Sustainability Analysis (English)

Guinea is at moderate risk of external debt distress, with limited space to absorb shocks. All external debt burden indicators under the baseline scenario, which accounts for the negative impact of the Coronavirus (COVID-19) pandemic, lie below their policy-dependent thresholds. Stress tests suggest that debt vulnerabilities will increase if adverse shocks materialize. Under the most extreme stress tests, all solvency and liquidity indicators breach their thresholds for prolonged periods. The overall risk of public debt distress is also assessed to be moderate, with the application of judgement regarding a brief and marginal breach for the present value (PV) of total-public-debt-to-gross domestic product (GDP) ratio over 2021–2022, reflecting additional borrowing in 2020 to meet urgent balance of payments and fiscal needs due to the Coronavirus (COVID-19) pandemic, and the one-off impact of the recapitalization of the central bank. This assessment hinges on commitments to moderate the increase in the envelope of public investment projects over 2020-2023 with respect to the plans included in the March 2020 DSA at the time of the Fourth Review under the External Contingency Facility (ECF) arrangement. A prudent external borrowing strategy aimed at maximizing the concessionality of new debt, strengthening debt management and enhancing public investment management will be key to preserving medium-term debt sustainability.

Details

  • Document Date

    2020/12/01

  • Document Type

    Board Report

  • Report Number

    155230

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2020/12/18

  • Disclosure Status

    Disclosed

  • Doc Name

    Guinea - Joint World Bank-IMF Debt Sustainability Analysis

  • Keywords

    public debt; debt service; real gdp; domestic arrears; fiscal balance; contingent liability; contingent liabilities; risk of debt; public sector debt; nominal interest rate; total public debt; debt-creating flow; baseline scenario; real exchange rate depreciation; Public and Publicly Guaranteed; real interest rate; primary deficit; present value of debt; debt service to export; external debt sustainability; state-owned enterprise; grace period; alternative scenarios; external borrowing; public investment in infrastructure; current account deficit; commodity price shock; debt service payment; debt service relief; grant element; guaranteed debt; primary balance; domestic debt; export ratio; Effective interest rate; public investment management; balance of payment; exchange rate change; debt relief; financing need; dollar term; external financing; financed capital expenditure; external public debt; urban road network; external debt ratios; local currency debt; public infrastructure investment; good faith effort; mining production capacity; central government debt; debt sustainability analysis; exchange rate projections; external debt burden; macroeconomic and fiscal; private sector debt; change in arrears; total external debt; public sector borrowing; medium-term debt sustainability; total debt; net domestic borrowing; central bank debt; debt service burden; central bank independence; index components; social security fund; extra budgetary fund; foreign direct investment; primary fiscal deficit; import of goods; concessional loan; reform implementation; pandemic response; short-term debt; budget support; policy scenario; natural disaster; historical growth; financial market; debt dynamic; government revenue; sustainability indicator; dam loan; commercial creditor; bilateral creditor; external arrears; first year; external demand; debt external; high ratio; debt accumulation; domestic financing; data availability; fiscal need

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Citation

Guinea - Joint World Bank-IMF Debt Sustainability Analysis (English). Washington, D.C. : World Bank Group http://documents.worldbank.org/curated/en/202851608337855373/Guinea-Joint-World-Bank-IMF-Debt-Sustainability-Analysis