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PRESERVING DEBT SUSTAINABILITY IN LOW-INCOME COUNTRIES IN THE WAKE OF THE GLOBAL CRISIS

The global financial crisis has had a significant impact on low-income countries (LICs)’ debt vulnerabilities. Recent debt sustainability analyses (DSAs) indicate that external and fiscal financing requirements have increased. In addition, standard measures of a country’s capacity to repay debt―GDP, exports, and fiscal revenue―are expected to be permanently lower. On average, debt ratios are therefore expected to deteriorate in the near term, particularly for public debt [...]