The debt sustainability analysis (DSA) indicates that St. Vincent and the Grenadines’ public debt is sustainable but remains at high risk of distress for both external and overall public debt (unchanged from the previous assessment in the 2018 Article IV staff report). With the pandemic crisis and the economic contraction, the fiscal position will deteriorate in 2020, and total public and publicly guaranteed debt is expected to increase from 75.2 percent of gross domestic product (GDP) in 2019 to 85.8 percent in 2020. Beyond 2021, the large port project will put additional pressure on public finances. The authorities are committed to increasing the central government primary balance from a deficit of 3.7 percent of GDP in 2020 to a surplus of no less than 2.1 percent of GDP by 2025, mainly through expenditure-side measures. This will put the debt-to-GDP ratio on a solid downward path after 2021 and make debt sustainable in a forward-looking sense. Under staff’s baseline scenario, the present value (PV) of public debt as a percent of GDP is projected to start falling in 2021 and that of external debt in 2024 but stay above indicative benchmarks for an extended period. The PV of debt-to-exports and the debt service-to-exports ratios will fall below the indicative threshold by 2021 and 2023, respectively.
Details
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Document Date
2020/05/01
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Document Type
Board Report
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Report Number
150918
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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
2020/07/16
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Disclosure Status
Disclosed
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Doc Name
St. Vincent and Grenadines - Joint World Bank-IMF Debt Sustainability Analysis
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Keywords
public debt; natural disaster; real gdp; public sector debt; total public debt; primary balance; Public and Publicly Guaranteed; debt service; baseline scenario; debt-creating flow; real exchange rate depreciation; grace period; real interest rate; nominal interest rate; current account deficit; exemption from import duty; annual average growth rate; eastern caribbean currency union; debt sustainability analysis; regional disaster vulnerability reduction; import of goods; contingent liabilities; contingent liability; financing need; current account balance; export ratio; total external debt; external public debt; risk of debt; central government fiscal; exchange rate change; public external debt; regional financial institution; external debt sustainability; central government debt; risk of distress; global interest rates; primary deficit; domestic debt; vat on import; commodity price shock; social security fund; natural disaster risk; private investment rate; debt service burden; public debt sustainability; public investment management; alternative scenarios; natural disaster scenarios; put pressure; private external debt; tourism; fiscal policy framework; fiscal consolidation effort; local debt market; international reserve; extra budgetary fund; macroeconomic and fiscal; private sector debt; geothermal power plant; state-owned enterprise; Water and Energy; change in arrears; exchange rate projections; public sector borrowing; Effective interest rate; dollar term; real economic growth; percent change; income support program; tourism sector; exchange rate peg; debt dynamic
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Citation
St. Vincent and Grenadines - Joint World Bank-IMF Debt Sustainability Analysis (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/697391594937407424/St-Vincent-and-Grenadines-Joint-World-Bank-IMF-Debt-Sustainability-Analysis