<\/p>\n
The IMF Executive Board reviewed the joint IMF-World Bank Debt Sustainability Framework for Low-Income Countries on September 9.<\/p>\n
<\/p>\n
The framework helps governments, creditors and development partners assess whether countries can meet debt obligations without compromising economic stability or essential public spending.<\/p>\n
<\/p>\n
Since the previous review in 2017, debt levels have risen in many low-income countries, while governments have increasingly borrowed on commercial terms from domestic and international markets.<\/p>\n
<\/p>\n
The IMF said the framework had successfully identified debt problems in advance and remained \u201cfit for purpose\u201d, but required adjustments to reflect a more complex financing environment.<\/p>\n
<\/p>\n
The revised framework will distinguish more clearly between countries experiencing debt pressure and those whose debt is considered unsustainable.<\/p>\n
<\/p>\n
Debt-carrying capacity measurements and thresholds will be recalibrated, with new tools introduced to assess overall public debt risks.<\/p>\n
<\/p>\n
Domestic borrowing will receive greater attention because of the growing importance of local-currency debt in many low-income countries.<\/p>\n
<\/p>\n
The framework will also examine long-term financing pressures from development and climate-adaptation needs.<\/p>\n
<\/p>\n
The IMF said this would help countries determine how much fiscal space remained available for essential investment without creating unsustainable debt burdens.<\/p>\n
<\/p>\n
Forecasting tools and stress tests will be strengthened to improve the consistency and accuracy of debt projections.<\/p>\n
<\/p>\n
Debt coverage will include greater scrutiny of state-owned enterprises, special-purpose entities and other public-sector liabilities.<\/p>\n
<\/p>\n
Countries will also receive a confidence rating based on the quality, coverage, transparency and reliability of public debt data.<\/p>\n
<\/p>\n
IMF Directors said improved data requirements should not unfairly penalise countries making genuine efforts to strengthen reporting.<\/p>\n
<\/p>\n
The reforms will retain structured judgement in final debt assessments, allowing country-specific conditions to be considered while promoting consistent treatment.<\/p>\n
<\/p>\n
The harmonised discount rate used under the framework and the IMF Debt Limits Policy will remain unchanged at 5%.<\/p>\n
<\/p>\n
Implementation is expected during the second half of 2027, following publication of operational guidance and training for country authorities and IMF teams.<\/p>\n
<\/p>\n
The IMF said clear communication, capacity development and continued engagement with governments, creditors, civil society and other stakeholders would be essential for a smooth transition.<\/p>\n
<\/p>\n
The revised framework will apply to country documents submitted for Executive Board consideration after the IMF\u2019s 2027 summer recess.<\/p>\n
<\/p>\n
–IMF\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":44013,"template":"","meta":{"_acf_changed":false,"_links_to":"","_links_to_target":""},"news-type":[44],"class_list":["post-46071","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"The International Monetary Fund (IMF) has approved reforms to strengthen how debt risks are assessed in low-income countries amid rising borrowing, climate pressures and development financing needs.","published_date":"","news_description":"The International Monetary Fund (IMF) has approved reforms to strengthen how debt risks are assessed in low-income countries amid rising borrowing, climate pressures and development financing needs.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/46071","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":1,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/46071\/revisions"}],"predecessor-version":[{"id":46072,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/46071\/revisions\/46072"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/44013"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=46071"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=46071"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}