Low-income countries (LICs) have often struggled with large external debts. The IMF and the World Bank introduced the Debt Sustainability Framework for such countries in April 2005 and have made changes to it periodically.
This video explains what debt sustainability is and why it is important.
Download the interactive guide on Debt Sustainability Framework for low-income countries.
Present value of external debt
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External debt service
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Present value of total public debt
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GDP | Exports | Exports | Revenue | GPD | ||
Strong | 50 | 240 | 21 | 23 | 70 | |
Medium | 40 | 180 | 15 | 18 | 55 | |
Weak | 30 | 140 | 10 | 14 | 35 |
The DSF facilitates comparability across countries and is used by the IMF and World Bank in their analysis and policy advice. Debt sustainability assessments help determine access to IMF financing and also are used for the design of debt limits in IMF-supported programs.
The framework’s effectiveness in preventing excessive debt accumulation hinges on its broad use by borrowers and creditors. Low-income countries are encouraged to use the DSF or a similar framework and creditors are encouraged to incorporate debt sustainability assessments into their lending decisions.
This page was last updated in February 2023