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Botswana: Staff Report for the 2009 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund
Published Date:
June 2010
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I. Relations with the Fund

(As of April 30, 2009)

I. Membership status Joined July 24, 1968; VIII.

II. General resources account

SDR (million)Percent of Quota
Quota63.00100.00
Fund holdings of currency54.5386.56
Reserve position in Fund8.4813.45

III. SDR department

SDR (million)Percent of Quota
Net cumulative allocation4.36100.00
Holdings39.66909.81

IV. Outstanding purchases and loans None

V. Financial arrangements None

VI. Project obligations to Fund None

VII. Implementation of HIPC initiative None

VIII. Exchange rate arrangements

The exchange rate of the Botswana pula is a crawling peg arrangement against a basket of currencies. As of May 31, 2009, the exchange rate of the U.S. dollar to the pula was US$1=P6.88, and that of the South African rand to the pula was R1=P0.84.

Botswana accepted the obligations of Article VIII, Sections 2, 3, and 4 of the Fund’s Articles of Agreement, as of November 17, 1995, and maintains an exchange rate system free of restrictions in the making of transfers and payments of current account transactions.

IX. Article IV consultation

Botswana is on a standard 12-month consultation cycle. The last Article IV consultation was concluded by the Executive Board on December 7, 2007. Directors agreed with the thrust of the staff appraisal.

X. Technical assistance assignments/projects

DepartmentDatesPosition
MFD1997Central banking advisor
1999-2000Banking supervision advisor
STA1997Balance of payments advisor

XI. Technical assistance missions

DepartmentDatesPurpose
MFDJanuary 2001Banking supervision advisor
February 2001Monetary operations
December 2001MEFMI–Monetary operations
August 2002Banking supervision, anti-money laundering
July 2004NBFI supervision
August 2004Money and banking statistics follow-up
FADNovember 1997Introduction of a VAT
September 2000Implementation of VAT next steps
February 2002Tax administration (SADC Region)
November 2004Public expenditure management
LEGJanuary 2006Review of amended VAT provisions
July 2006Review of central bank law
June 2007Review of VAT laws
STAMay 2001Inspection for visit of long-term balance of payments advisor
April 2002ROSC data module
July 2002BOP statistics: peripatetic visit
August 2003Monetary and financial statistics using the GDDS
June 2004GDDS project for Anglophone Africa: National accounts statistics
August 2004Follow-up mission: Money and banking statistics
October 2004GDDS: National accounts mission
June 2005Follow-up on monetary and financial statistics using the GDDS
August 2005Follow-up mission: GDDS quarterly balance of payments statistics
March 2006GDDS project for Anglophone Africa: balance of payments statistics
March 2006GDDS project for Anglophone Africa: national accounts statistics
October 2006ROSC data module covering GDDS and Data Quality Assessment Framework (DQAF)
October 2007Monetary and Financial Statistics
November 2007–November 2008Real Sector Statistics (Resident Regional Advisor)
November 2008Money and Banking Statistics
February 2009Phase II SDDS- Balance of Payments Statistics
June 2009–June 2010Real Sector Statistics (Resident Regional Advisor)
MCMJanuary, March 2007IMF-World Bank Financial Sector Assessment Program (FSAP)
December 2008Inflation forecasting and modeling
January 2009Risk Management Framework
January 2009Risk Management Framework
February 2009, April 2010Payments Systems (LT Resident Expert Assignment)
July 2009Monetary Operations

II. JMAP: Botswana—World Bank and IMF Work Programs

(As of June 9, 2009)

TitleProductsProvisional Timing of MissionsExpected Delivery Date
A. Mutual Information on Relevant Work Programs
World Bank indicative work program in the next 12 months1.Country Partnership StrategyBank Board Q4, FY09 (discussed)
2.Electricity Program
Morupule B Generation and Transmission Power Project (SIL/PCG)FY10
Mmamabula IPP Power Project PRG (TBD)FY11 (TBD)
3.HIV/AIDS ProjectBank Board Q1, FY09 (approved)
4.Integrated Transport ProjectBank Board Q4, FY09 (approved)
5.DPL (Budget Support)FY10
6.Wildlife Conflict Management and Biodiversity Conservation for Improved Rural Livelihoods Project (Global Environment Facility)Q2, FY10
7.Statistics/Capacity-building
Strengthening Monitoring and Evaluation capacity for Vision 2016 Council (IDF Grant)FY10; On-going
Strengthening Statistical Capacity for Poverty AnalysisFY10; On-going
Strengthening Institute & Accountants (IDF Grant)FY09
8.Carbon Finance Assistance ProgramFY10
9.Post ICA Follow-up/Financial Systems Stability Assessment (TA)FY10
10.Water Sector:FY09/FY10
FBSA Technical Advisory Services (Phases 1 & 2)FY10
11.Sustainable Development (SDN) Policy NotesFY10
12.PER/PFM Reform (TA)FY11
13.Development Policy Review (DPR)FY10
14.Skills Gap/Labor MarketsFY10
15.Macro-Modeling (TA)FY10
16.Capacity building in NBFI (TA)FY10
17.Strategic Issues in Competitiveness StudyFY10
18.Issues Notes on Accrual AccountingFY10
IMF work program in the next 12 monthsSTA TA on monetary and balance of payments statisticsOngoing
MCM TA on monetary and financial sector issues, including: revision of the Bank of Botswana Act and the Banking Act; macroeconomic modeling; payment systems modernizationOngoing FY 2010
FAD TA on tax administration and public financial managementExpected FY 2010
LEG TA on tax administration and income tax law reformExpected FY 2010
Article IV consultationMay 2009
B. Requests for Work Program Inputs
Fund request to BankPeriodic update on progress
Bank request to FundPeriodic macro update

III. Statistical Issues

1. Data provision is adequate to conduct surveillance, but there are some shortcomings. The accuracy of data, particularly for the national accounts and balance of payments, needs improvement. National accounts are now prepared on a calendar basis rather than the July-June schedule. Historical data have been adjusted accordingly

2. A ROSC reassessment took place October 31–November 13, 2006 and the report, along with the authorities’ response, was published on April 6, 2007. Cross-cutting recommendations were to monitor the consistency of the main macroeconomic datasets and reconcile differences regularly; establish a list of institutional units consistent with sectorization in the 1993 System of National Accounts (1993 SNA), to be applied consistently across all datasets; and support greater use of preliminary data by formalizing revision policies and implementing regular revision cycles.

3. As one of 22 countries participating in the Fund’s General Data Dissemination System (GDDS) Project for Anglophone African Countries, Botswana has undertaken to use the GDDS as framework for the development of its national statistical system. Also, in preparation for eventual SDDS subscription, Botswana is participating in the monetary and financial statistics modules of the Anglophone Africa project (funded by the U.K. Department for International Development (DFID)). This project aims to assist participating countries to implement plans for improvement identified in the metadata, which were posted on the Fund’s Dissemination Standards Bulletin Board on October 24, 2002. Recent advances include the publication of the National Summary Data Page on the BoB website and the dissemination of advance release calendars for key macroeconomic data.

National accounts and prices

4. Using the production and expenditure approaches, national accounts are now principally based on the concepts and definitions recommended by the 1993 SNA, in line with the strong commitment of the authorities to migrate to the 1993 SNA, but some changes are needed for full observance. For instance, classification and sector breakdowns are still broadly in line with 1968 SNA. Staff welcomes the authorities recent decision to harmonize the accounting period for national accounts It would be important to conduct comprehensive enterprise surveys every few years and introduce estimates for the informal sector. Detailed recommendations are contained in the April 2007 ROSC report.

5. The consumer price index is comprehensive and provides breakdowns between urban and rural areas and between tradable (domestic and imported) and nontradables. The Classification of Individual Consumption by Purpose (COICOP) in the rebased CPI (September 2006) broadly conforms with the guidelines of 1993 SNA and the CPI Manual, although there are still deviations with respect to the imputation of rents and owner-occupied housing. Estimates from the Household Income and Expenditure Survey (HIES) are used for the weights of market expenditure for goods and services. With respect to the wholesale price index (WPI), the ROSC mission recommended the development of concepts and definitions to meet the needs of data users. The Central Statistics Office is to decide whether to produce an output index (PPI), an Intermediate Consumption Index or a Supply Price Index. Currently, the WPI of industrial output is not representative of industrial production, because it measures changes in the prices of only six product groups.

Fiscal accounts

6. The concepts and definitions used in compiling central government finance statistics generally follow the methodology of the IMF’s Government Finance Statistics Manual (GFSM 1986) but cover only budgetary central government activities. No fiscal statistics are compiled for extrabudgetary institutions and consolidated central government. The classification used for budgetary central government partially follows the concepts of GFSM 1986. Detail on some components of current spending is lacking. Transactions are recorded on a cash basis consistent with the GFSM 1986 guidelines. In general, the statistics disseminated in official publications are presented clearly and are made available to all users simultaneously. The data ROSC mission recommended at least annual compilation and dissemination of GFS for extrabudgetary institutions, and the consolidated general government. The authorities have yet to decide on a suitable “migration path” to adopt the GFSM 2001 methodology. The authorities regularly report monthly data on budgetary central government for inclusion in the International Financial Statistics (IFS), but no data are reported for inclusion in the Government Finance Statistics Yearbook.

7. The periodicity of central government finance statistics meets GDDS standards, except for timeliness. It should be noted that information is available to permit compilation and dissemination of government finance statistics within the GDDS recommendations.

Monetary accounts

8. The Bank of Botswana’s (BoB) compilation of the depository corporations survey is generally consistent with the methodology recommended in the Fund’s Monetary and Financial Statistics Manual (MFSM). The survey covers BoB and all other depository corporations, excluding Savings and Credit Cooperatives, that issue liabilities included in the national definition of broad money as recommended in the MFSM. Classification and sectorization are largely consistent with MFSM, except for the classification of financial derivatives. In addition, some nonbudgetary central government units are classified as nonfinancial public corporations and accrued interest is not consistently presented together with the underlying instrument.

9. Monetary data for publication in International Financial Statistics are reported regularly using Standardized Report Forms. Although reporting is more timely, data concerning the central bank are still being reported to STA with a longer lag than those for the other depository corporations.

External sector statistics

10. The concepts, structure and definitions of the balance of payments statistics follow the fifth edition of the Balance of Payments Statistics Manual (BPM5). Institutional classifications generally follow BPM5, although data sources raise minor issues, in particular, administrative sources using definitions and classifications that deviate from BPM5. Source data are adequate, but International Transaction Reporting System (ITRS) data, used mostly for services, have become unreliable, and alternative data sources are needed. Data compilation, estimation, and adjustments mostly employ sound techniques. However, the methods for estimating missing data and calculating flows from stock data are inadequate.

11. Balance of payments statistics are compiled and published in the BoB’s monthly statistical bulletin and the Annual Report, thus meeting GDDS periodicity and timeliness recommendations, although only annual balance of payments statistics are reported to STA for publication. There are discrepancies with national accounts statistics concerning imports, exports, and payments related to settlements within the Southern African Customs Union (SACU), mainly due to different data sources and valuation methods. A recent TA mission has identified gaps in recording of portfolio investments and services.

Table 1.Botswana: Common Indicators Required for Surveillance(As of June 10, 2009)
Memo Items:
Date of Latest ObservationDate ReceivedFrequency of Data 1/Frequency of Reporting 1/Frequency of Publication 1/Data Quality—Methodological Soundness 2/Data Quality—Accuracy and Reliability 3/
Exchange ratesMar. 20096/10/2009MMM
International reserve assets and reserve liabilities of the monetary authorities 4/Mar.20096/10/2009MMM
Reserve/base moneyMar. 20096/10/2009MMMO, O, LO, OLNO, O, LO, LO, LO
Broad moneyMar. 20096/10/2009MMM
Central bank balance sheetMar. 20096/10/2009MMM
Consolidated balance sheet of the banking systemMar. 20096/10/2009MM
Interest rates 5/Mar. 20096/10/2009MMM
Consumer price indexApr. 2009May 2009MMMO, LO, O, OLO, LO, LO, LO, O
Revenue, expenditure, balance and composition of financing 6/—general government 7/NANALO, LNO, LNO, LOLO, O, LO, LO, LNO
Revenue, expenditure, balance and composition of financing 6/—central governmentMar. 2009May 2009A/QQQ
Stocks of central government and central government-guaranteed debt 8/NANA
External current account balance2008May 2009AAAO, O, O, LOLO, LO, LNO, O, LO
Exports and imports of goods and services2009 Q1May 2009M/QMQ
GDP/GNP2008May 2009A/QA/QA/QLO, LO, LNO, LOLO, LO, LNO, LO, LO
Gross external debtDec. 2008May 2009A/QAA

IV. Public Sector Debt Sustainability Analysis

The public sector debt sustainability analysis (DSA) shows little risk of debt distress, even under various stress tests. Despite the sizeable increase in public debt expected during 2009-10, the DSA indicates that Botswana’s public debt would remain sustainable over the medium term. However, continued large fiscal deficit over the medium term would worsen the debt indicators considerably, underscoring the need for fiscal measures.

1. At end-2008, Botswana’s public debt is estimated at about P5.1 billion, (5.6 percent of GDP). About 30 percent of the debt is owed to bilateral and multilateral foreign creditors, while the rest is domestic debt. Botswana has a historically low level of public debt thanks to sound fiscal policies, which has led to fiscal surpluses and an accumulation of government reserves. However, the global financial crisis and the resulting lower demand for diamond has contributed to a sharp decline in government mineral revenues. This, combined with a significant rise in public spending, would result in a large fiscal deficit of 11.1 percent of GDP in FY 2009/10, which is expected to be more than fully financed by a budget support loan from the African Development Bank (AfDB), amounting to about 13 percent of GDP. On current projections, the debt-to-GDP ratio would rise from 5.6 percent of GDP in 2008 to 24.4 percent of GDP by 2010, driven largely by rising external debt and a decline in GDP by 10.3 percent in 2009, before declining thereafter to reach 15 percent of GDP by 2014.

2. The baseline scenario underlying the macroeconomic framework assumes that the central government primary budget balance moves from a substantial surplus in 2007 to a deficit in 2008, and remains so through 2011 before returning into a surplus during 2012-2014. Revenue and grants are projected to remain stable around 33 percent of GDP in the medium term, while primary expenditure is projected to increase by 8.5 percentage point of GDP in 2009, as the government undertakes large infrastructure projects. Expenditures would gradually decline in the medium term, as ongoing infrastructure projects are completed. Reflecting the more expansionary fiscal stance, the public debt-to-revenue ratio, which was 17.1 percent in 2008, would increase to 46.4 percent of GDP by 2014.

3. Table 1 presents two additional scenarios. The first scenario shows the fiscal outcome if real GDP growth, real interest rates, and the primary balance are maintained at their historical 10 year averages. In this case, the public debt-to-GDP ratio would drop to zero by 2012, reflecting strong economic growth, as well as the prudent fiscal stance in the recent past. The second scenario shows the outcome if the government’s policies remain unchanged, with the result that the primary deficit for the projection period remains at the unprecedented level of 9.5 percent of GDP. In this case, debt indicators would worsen considerably, with public debt rising to 48.2 percent of GDP by the end of the forecast period, underscoring the need to reduce expenditures to sustainable levels.

Table 1.Botswana: Public Sector Debt Sustainability Framework, 2004-2014(In percent of GDP, unless otherwise indicated)
ActualProjections
20042005200620072008200920102011201220132014Debt-stabilizing primary balance 9/
Baseline: Public sector debt 1/9.97.45.65.25.620.824.421.718.316.015.00.4
o/w foreign-currency denominated4.64.12.92.31.715.714.512.910.99.59.0
Change in public sector debt-1.3-2.5-1.9-0.30.415.23.5-2.7-3.4-2.3-0.9
Identified debt-creating flows (4+7+12)-2.7-6.7-11.7-7.02.410.78.43.0-1.4-1.8-0.7
Primary deficit-1.5-7.5-10.9-6.62.49.59.54.70.9-0.5-0.7
Revenue and grants37.140.439.837.432.734.133.033.933.132.232.4
Primary (noninterest) expenditure35.732.928.930.835.143.642.538.634.131.731.7
Automatic debt dynamics 2/-1.20.9-0.8-0.40.01.2-1.1-1.6-2.3-1.30.0
Contribution from interest rate/growth differential 3/-1.1-0.4-1.1-0.4-0.51.2-1.1-1.6-2.3-1.30.0
Of which contribution from real interest rate-0.5-0.3-0.8-0.2-0.40.5-0.30.20.20.10.3
Of which contribution from real GDP growth-0.6-0.1-0.3-0.2-0.10.7-0.8-1.9-2.5-1.4-0.3
Contribution from exchange rate depreciation 4/-0.21.20.30.00.5
Other identified debt-creating flows0.00.00.00.00.00.00.00.00.00.00.0
Privatization receipts (negative)0.00.00.00.00.00.00.00.00.00.00.0
Recognition of implicit or contingent liabilities0.00.00.00.00.00.00.00.00.00.00.0
Other (specify, e.g. bank recapitalization)0.00.00.00.00.00.00.00.00.00.00.0
Residual, including asset changes (2-3) 5/1.54.19.86.7-2.04.5-4.9-5.7-2.0-0.5-0.2
Public sector debt-to-revenue ratio 1/26.818.414.014.017.161.073.763.955.149.646.4
Gross financing need 6/-0.6-6.6-10.3-6.12.910.511.87.23.31.61.3
in billions of U.S. dollars-0.1-0.7-1.2-0.80.41.11.30.80.40.20.2
Scenario with key variables at their historical averages 7/20.811.00.50.8
Scenario with no policy change (constant primary balance) in 2009-201420.824.426.631.338.448.21.2
Key Macroeconomic and Fiscal Assumptions Underlying Baseline
Real GDP growth (in percent)6.01.65.14.42.9-10.34.18.613.88.92.0
Average nominal interest rate on public debt (in percent) 8/6.36.86.66.78.56.23.25.06.36.46.3
Average real interest rate (nominal rate minus change in GDP deflator, in percent)-4.9-2.7-12.6-3.7-8.58.3-1.31.31.71.12.0
Nominal appreciation (increase in US dollar value of local currency, in percent)3.8-22.3-8.60.4-20.1
Inflation rate (GDP deflator, in percent)11.29.419.110.417.0-2.14.53.74.65.34.4
Growth of real primary spending (deflated by GDP deflator, in percent)-5.3-6.3-7.811.417.511.31.6-1.60.51.32.1
Primary deficit-1.5-7.5-10.9-6.62.49.59.54.70.9-0.5-0.7
A2. No policy change (constant primary balance) in 2005-0920.824.426.631.338.448.21.2
B. Bound Tests
B1. Real interest rate is at historical average plus one standard deviation20.825.123.220.418.618.41.1
B2. Real GDP growth is at historical average minus one standard deviation20.825.123.421.320.521.90.8
B3. Primary balance is at historical average minus one standard deviation20.826.826.525.124.926.70.7
B4. Combination of B1-B3 using 1/2 standard deviation shocks20.826.025.023.022.223.11.1
B5. One time 30 percent real depreciation in 2006 10/20.831.428.524.622.021.20.5
B6. 10 percent of GDP increase in other debt-creating flows in 200620.834.431.427.124.423.70.6

4. The bounds tests illustrate the sensitivity of the fiscal position to exogenous shocks (Figure 1). The results show that with different levels of standard deviation shock to key indicators, the debt-to-GDP ratio is projected to increase by between 3 to 12 percentage points of GDP depending on the shock. The most benign shock is that from the real interest rate, which nevertheless could result in up to 3.4 percentage points increase in the debt-to-GDP ratio relative to the baseline scenario, while a worsening in the 10 year historical average primary balance by one standard deviation results in a 11.7 percentage points increase in the debt-to-GDP ratio.

Figure 1.Botswana: Public Debt Sustainability: Bound Tests 1/

(Public debt in percent of GDP)

Sources: International Monetary Fund, country desk data, and staff estimates.

1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.

2/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and primary balance.

3/ One-time real depreciation of 30 percent and 10 percent of GDP shock to contingent liabilities occur in 2009, with real depreciation defined as nominal depreciation (measured by percentage fall in dollar value of local currency) minus domestic inflation (based on GDP deflator).

V. External Debt Sustainability Analysis

The external debt sustainability analysis indicates that Botswana’s external debt would remain sustainable in the medium term even under various stress tests. Total external debt is projected to increase substantially, although from a very low level at present, reflecting external budget support and financing of the power plant projects.

1. Botswana’s gross external debt stood at $1.2 billion (11.2 percent of GDP) at the end of 2008, with short-term debt accounting for one-fifth of total external debt. Public external debt was at a low level of 2.7 percent of GDP in 2008.

Table 1.External Debt Indicators, 2008
2008
Gross external debt (in millions of U.S. dollars)1,248
(in percent of GDP)11.2
Of which:
Public debt295
(in percent of GDP)2.7
Short-term debt (in millions of U.S. dollars)250
(in percent of GDP)2.3
Gross official reserves (in millions of U.S. dollars)9,125
(ratio to short-term debt)36.5
(ratio to reserve money)3.3
Memorandum items:
GDP at current market prices (in million U.S.dollars)11,101
Reserve money (in million U.S. dollars)2,745
Sources: Bank of Botswana and Fund staff estimates.

2. Under the baseline medium-term macroeconomic scenario, gross external debt is projected to increase to 48.1 percent of GDP by 2012, and trend downward thereafter to 40.8 percent of GDP by 2014. This reflects primarily the new loan from the AfDB (US$1.5 billion) and the external borrowing related to the Morupule (US$750 million) and Mmamabula (US$2.4 billion) power plant projects. The initial increase in 2009 is also explained by the projected 10.3 percent contraction in real GDP due to significantly lower diamond production. The current account surplus, excluding interest payments, is expected to turn into a deficit during 2009-11, largely owing to a drop in external demand for diamonds in 2009 and a rise in imports related to the power plant projects. Current account surpluses are expected during 2013-14, reflecting a recovery in the diamond sector and electricity exports to South Africa. The external debt-to-export ratio is projected to rise significantly beginning in 2009 and to reach a peak of 121.1 percent in 2011 before gradually falling to 86.5 percent by 2014.

3. The bounds tests suggest that Botswana’s external debt position would remain sustainable even if there are shocks. Botswana’s external debt-to-GDP ratio is robust to growth and interest rate shocks, but appears more sensitive to a current account shock and an exchange rate shock (a 30 percent depreciation), and to a combination of growth, interest rate, and current account shocks.

Table 1.Country: External Debt Sustainability Framework, 2004-2014(In percent of GDP, unless otherwise indicated)
ActualProjections
20042005200620072008200920102011201220132014Debt-stabilizing non-interest current account 6/
Baseline: External debt11.913.712.510.29.322.636.547.748.143.040.80.7
Change in external debt-3.81.8-1.2-2.3-1.013.413.911.20.3-5.1-2.1
Identified external debt-creating flows (4+8+9)-10.8-18.0-22.6-19.0-7.67.412.14.6-2.5-8.6-6.0
Current account deficit, excluding interest payments-4.7-15.9-18.1-15.2-7.87.115.08.83.3-6.6-6.8
Deficit in balance of goods and services-7.8-16.8-16.4-11.4-1.514.323.117.110.8-0.4-0.7
Exports44.251.447.047.643.535.435.739.441.446.447.2
Imports36.534.630.736.342.049.758.856.552.246.046.5
Net non-debt creating capital inflows (negative)-4.3-2.4-4.2-3.70.3-2.0-3.6-3.8-3.2-1.5-1.6
Automatic debt dynamics 1/-1.80.4-0.3-0.20.02.30.7-0.4-2.5-0.52.5
Contribution from nominal interest rate1.30.80.90.90.81.11.62.63.33.43.3
Contribution from real GDP growth-0.8-0.2-0.6-0.5-0.31.2-0.9-3.0-5.8-3.9-0.8
Contribution from price and exchange rate changes 2/-2.3-0.2-0.5-0.5-0.6
Residual, incl. change in gross foreign assets (2-3) 3/7.019.821.316.86.65.91.86.62.83.53.8
External debt-to-exports ratio (in percent)27.026.726.621.521.364.0102.4121.1116.192.686.5
Gross external financing need (in billions of US dollars) 4/0.7-0.5-0.4-0.1-0.41.52.52.22.00.80.9
in percent of GDP6.9-4.7-3.7-0.8-3.313.822.919.115.05.65.9
Scenario with key variables at their historical averages 5/22.610.92.7-1.3
Key Macroeconomic Assumptions Underlying Baseline
Real GDP growth (in percent)6.01.65.14.42.9-10.34.18.613.88.92.0
GDP deflator in US dollars (change in percent)17.01.33.74.66.0-12.00.2-2.5-0.20.70.1
Nominal external interest rate (in percent)10.06.57.07.78.89.37.27.47.77.97.9
Growth of exports (US dollar terms, in percent)20.919.7-0.310.6-0.4-35.85.316.919.322.93.8
Growth of imports (US dollar terms, in percent)31.5-2.3-3.329.226.2-6.623.61.74.9-3.33.2
Current account balance, excluding interest payments4.715.918.115.27.8-7.1-15.0-8.8-3.36.66.8
Net non-debt creating capital inflows4.32.44.23.7-0.32.03.63.83.21.51.6
B. Bound Tests
B1. Nominal interest rate is at historical average plus one standard deviation22.636.748.148.743.942.11.1
B2. Real GDP growth is at historical average minus one standard deviations22.636.848.549.344.943.61.4
B3. Non-interest current account is at historical average minus one standard deviations22.638.952.454.952.052.71.4
B4. Combination of B1-B3 using 1/2 standard deviation shocks22.637.950.752.448.948.91.6
B5. One time 30 percent real depreciation in 200622.646.458.658.254.053.50.7

Figure 1.Country: External Debt Sustainability: Bound Tests 1/

(External debt in percent of GDP)

Sources: International Monetary Fund, Country desk data, and staff estimates.

1/ Shaded areas represent actual data. Individual shocks are permanent one-half standard deviation shocks. Figures in the boxes represent average projections for the respective variables in the baseline and scenario being presented. Ten-year historical average for the variable is also shown.

2/ Permanent 1/4 standard deviation shocks applied to real interest rate, growth rate, and current account balance.

3/ One-time real depreciation of 30 percent occurs in 2009.

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