This debt sustainability analysis (DSA) updates the joint World Bank-fund analysis of February 2020 to reflect Nepal’s recent economic development, which have been considerably affected by the Coronavirus 2019 (COVID-19) pandemic and related containment policies. Even under the COVID-19 pandemic, Nepal’s debt is assessed to remain at a low risk of external and overall debt distress, unchanged from the 2020 DSA. None of the debt and debt service indicators breach the indicative threshold values. However, given elevated gross financing needs in Nepal, a deeper global slowdown can negatively affect Nepal’s risk of debt distress. The Nepalese authorities should continue to: (i) improve domestic productivity; (ii) streamline bureaucratic processes; (iii) compile public-private partnerships (PPP) projects and private sector external debt; (iv) implement a medium-term debt strategy and develop the government bond market; and (v) improve subnational governments’ public financial management and reporting, and implement a prudent framework for subnational borrowing.
Details
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Document Date
2020/05/01
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Document Type
Board Report
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Report Number
150950
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2020/07/18
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Disclosure Status
Disclosed
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Doc Name
Nepal - Joint World Bank-IMF Debt Sustainability Analysis
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Keywords
real gdp; debt service; contingent liability; contingent liabilities; commodity price; primary balance; market financing; natural disaster; alternative scenarios; financing need; real interest rate; nominal interest rate; public debt; debt-creating flow; primary deficit; grace period; public sector debt; dollar term; real exchange rate depreciation; Public and Publicly Guaranteed; export ratio; debt relief; total public debt; exchange rate change; current account deficit; debt sustainability analysis; risk of debt; short-term debt; baseline scenario; private sector debt; private external debt; government bond market; Public Financial Management; external debt sustainability; private investment rate; total external debt; Effective interest rate; exchange rate projections; errors and omission; public sector borrowing; commodity price shock; change in arrears; macroeconomic and fiscal; extra budgetary fund; external financing sources
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Citation
Nepal - Joint World Bank-IMF Debt Sustainability Analysis (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/359541595079918075/Nepal-Joint-World-Bank-IMF-Debt-Sustainability-Analysis