Abstract
According to the joint IMF-World Bank Debt Sustainability Framework for Low-Income Countries, the Central African Republic’s external debt is at high risk of distress. Debt relief is needed to reduce debt ratios to sustainable levels. Debt indicators in the initial years are significantly above the policy-dependent thresholds, particularly the NPV of external debt-to-export ratio. The public sector debt sustainability analysis (DSA) indicates that improvement in revenue collection and reduction of domestic borrowing are needed to bring down public debt to a sustainable level.4
I. Background
1. At the end of 2007 total public debt, including arrears, of the Central African Republic (C.A.R.) is estimated to have been 78 percent of GDP. External public and publicly guaranteed debt accounts for 54 percent of GDP, of which multilateral creditors account for more than half and official bilateral creditors about one-third. Domestic public debt (including budgetary arrears and domestic debt of public enterprises) amounts to 24 percent of GDP. It consists of outstanding credits to the government from domestic commercial banks (8 percent), government debt with the Bank for Central African States (BEAC, 30 percent), budgetary arrears (59 percent), and public enterprise debt (4 percent).
2. The external debt indicators show the C.A.R. as being at high risk of debt distress (Text Table 1). All the debt stock indicators are significantly above the policy-dependent indicative thresholds in the initial years. These ratios are projected to gradually decline over time, assuming the fiscal stance stays prudent and most new borrowing is on concessional terms. However, the NPV of debt-to-export ratio is projected to stay above the threshold until 2018.
Central African Republic: External Debt Indicators
Countries with a similar evaluation of policies and institutions that are over the policy-dependent threshold would face a probability of about 20 percent of experiencing a prolonged incident of debt distress in the coming year. The threshold corresponds to “weak policy”, reflecting C.A.R.’s average rating on the Country Policy and Institutional Assessment (CPIA) Index in 2005–07.
Central African Republic: External Debt Indicators
| Indicative Threshold 1 | 2007 Est. | 2028 Proj. | |
|---|---|---|---|
| NPV of external debt-to-GDP | 30 | 41 | 9 |
| NPV of external debt-to-exports | 100 | 296 | 63 |
| NPV of external debt-to-revenue (excluding grants) | 200 | 405 | 49 |
| External debt service-to-exports | 15 | 14 | 4 |
| External debt service-to-revenue (excluding grants) | 25 | 19 | 3 |
Countries with a similar evaluation of policies and institutions that are over the policy-dependent threshold would face a probability of about 20 percent of experiencing a prolonged incident of debt distress in the coming year. The threshold corresponds to “weak policy”, reflecting C.A.R.’s average rating on the Country Policy and Institutional Assessment (CPIA) Index in 2005–07.
Central African Republic: External Debt Indicators
| Indicative Threshold 1 | 2007 Est. | 2028 Proj. | |
|---|---|---|---|
| NPV of external debt-to-GDP | 30 | 41 | 9 |
| NPV of external debt-to-exports | 100 | 296 | 63 |
| NPV of external debt-to-revenue (excluding grants) | 200 | 405 | 49 |
| External debt service-to-exports | 15 | 14 | 4 |
| External debt service-to-revenue (excluding grants) | 25 | 19 | 3 |
Countries with a similar evaluation of policies and institutions that are over the policy-dependent threshold would face a probability of about 20 percent of experiencing a prolonged incident of debt distress in the coming year. The threshold corresponds to “weak policy”, reflecting C.A.R.’s average rating on the Country Policy and Institutional Assessment (CPIA) Index in 2005–07.
3. In September 2007 the C.A.R. reached the decision point for the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. The C.A.R. is receiving interim HIPC relief from several multilateral creditors. In April 2007 the Paris Club agreed to provide a 90 percent debt service cancellation and a deferral of debt service payments until 2009.
II. Underlying DSA Assumptions
4. The medium-to long-term macroeconomic framework underlying this assessment of debt sustainability is based on continued steady growth, supported by a stable political and social situation that should lead to a durable improvement in business confidence and to higher investment (Box 1). A critical element in the baseline scenario is continued reengagement of the international community in providing financial and technical assistance to support growth and structural reform.
5. The medium-term real GDP growth rate was increased by about 1 percentage point over the previous joint DSA (September 2007), reflecting several favorable factors discussed in the preliminary update (June 2008). In light of the recent developments, however, near-term growth projections for 2008–09 have been revised downward. Given the decline in nominal exports in 2008, in the medium term the export-to-GDP ratio would be lower than in the previous DSA.
Baseline Macroeconomic Assumptions
Real GDP growth: Average annual real GDP growth through 2028 is projected at 5¼ percent, predicated on sustained security and political stability, an improvement in the country’s institutional and administrative capacity, and appropriate macroeconomic policies. This environment should encourage an increase in private investment, especially in forestry, mining, and telecommunications. Public investment in infrastructure will help revive agriculture, which dominates economic activity. On these assumptions, the projected growth rate is significantly higher than the historical average experienced during the period of conflicts.
Inflation: After unexpected high inflation in 2008, the GDP deflator is projected to increase by 2½ percent on average through 2028; this assumes that inflation will moderate from the current level. The projected inflation rate is below the Central African Economic and Monetary Community (CEMAC)’s convergence criterion of 3 percent (defined by CPI).
Current account balance: The current account deficit (including grants) is projected to average about 7½ percent through 2028. The trade balance is projected to improve over time, driven by stronger export performance as a result of structural reform and infrastructure investment that will enhance the competitiveness and diversification of the export base; the deficits in service trade would remain large. The current account deficits would be financed primarily by official development assistance (project loans), foreign direct investment and regional capital inflows from the government securities markets. Two major mining projects are expected to start in 2010 and be implemented over several years; the ground is being prepared for sustained FDI inflows by the adoption of the new forestry and mining codes.
Government balance: The domestic primary surplus will be maintained at around 1 percent of GDP, and the overall fiscal deficit (including grants) is projected to average about ¾ percent of GDP through 2028. Tax and nontax revenue is projected to rise from almost 11 percent of GDP in 2008 to about 18 percent at the end of 2028, mainly as a result of tax and customs administration reform and tax buoyancy from sustained growth. Expenditures are projected to rise from about 14 percent of GDP in 2008 to about 23 percent in 2028.
External assistance: Total grants and loans are assumed to converge to about 4 percent of GDP in the long run. Grants are assumed to account for about 80 percent of total external assistance, and the grant element of new external loans would average 50 percent for the period.
Domestic borrowing: It is assumed that in 2009 the government will start accessing the securities markets that are being developed in the CEMAC region. This will allow it to improve liquidity and reduce domestic arrears; domestic debt will continue to decline because fiscal policy will continue to be prudent.
Real interest rate on domestic currency debt: The average real interest rate on domestic currency debt (including bonds from the regional markets) will converge to about 4 percent in the long run.
III. External DSA
A. Baseline
6. In the baseline scenario, which includes delivery of only interim HIPC assistance, all debt indicators in 2008 are above the policy-dependent thresholds (Figure 1 and Table 1a).5 In particular, the NPV of external public and publicly guaranteed (PPG) debt in 2008, estimated at 37 percent of GDP, is above the threshold. More significantly, the NPV of external PPG debt-to-exports ratio in 2008, estimated at 287 percent, is close to triple the threshold.
Central African Republic: Indicators of Public and Publicly Guaranteed External Debt under Alternatives Scenarios, 2008-28 1/
Citation: IMF Staff Country Reports 2009, 043; 10.5089/9781451806717.002.A002
1/ The most extreme stress test in figure b. corresponds to a one-time depreciation shock; in c. to an exports shock; in d. to a onetime depreciation shock; in e. to an exports shock; and in f. to a one-time depreciation shock.
Central African Republic: Indicators of Public and Publicly Guaranteed External Debt under Alternatives Scenarios, 2008-28 1/
Citation: IMF Staff Country Reports 2009, 043; 10.5089/9781451806717.002.A002
1/ The most extreme stress test in figure b. corresponds to a one-time depreciation shock; in c. to an exports shock; in d. to a onetime depreciation shock; in e. to an exports shock; and in f. to a one-time depreciation shock.Central African Republic: Indicators of Public and Publicly Guaranteed External Debt under Alternatives Scenarios, 2008-28 1/
Citation: IMF Staff Country Reports 2009, 043; 10.5089/9781451806717.002.A002
1/ The most extreme stress test in figure b. corresponds to a one-time depreciation shock; in c. to an exports shock; in d. to a onetime depreciation shock; in e. to an exports shock; and in f. to a one-time depreciation shock.Central African Republic: External Debt Sustainability Framework, Baseline Scenario, 2005-28 1/
(In percent of GDP, unless otherwise indicated)
Includes both public and private sector external debt.
Derived as [r - g - r(1+g)]/(1+g+r+gr) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and r = growth rate of GDP deflator in U.S. dollar terms.
Includes exceptional financing (i.e., changes in arrears and debt relief); changes in gross foreign assets; and valuation adjustments. For projections also includes contribution from price and exchange rate changes.
Assumes that PV of private sector debt is equivalent to its face value.
Current-year interest payments divided by previous period debt stock.
Defined as grants, concessional loans, and debt relief.
Grant-equivalent financing includes grants provided directly to the government and through new borrowing (difference between the face value and the PV of new debt).
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
Central African Republic: External Debt Sustainability Framework, Baseline Scenario, 2005-28 1/
(In percent of GDP, unless otherwise indicated)
| Actual | Historical Average 8/ | Standard Average 8/ | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2008-13 Average | 2018 | 2028 | 2014-28 Average | |||||||
| External debt (nominal) 1/ | 81.6 | 69.9 | 54.2 | 82.8 | 54.9 | 50.5 | 44.2 | 39.5 | 35.2 | 30.5 | 19.0 | 15.2 | 17.0 | ||||||
| Of which: public and publicly guaranteed (PPG) | 81.6 | 69.9 | 54.2 | 82.8 | 54.9 | 50.5 | 44.2 | 39.5 | 35.2 | 30.5 | 19.0 | 15.2 | 17.0 | ||||||
| Change in external debt | 2.8 | -11.7 | -15.7 | -4.2 | 0.8 | -4.4 | -6.4 | -4.7 | -4.4 | -4.6 | -1.5 | 1.2 | -1.0 | ||||||
| Identified net debt-creating flows | -0.8 | -6.1 | -6.9 | -2.8 | 2.2 | 0.9 | 1.0 | 1.7 | 1.6 | 1.6 | 1.1 | 2.7 | 1.6 | ||||||
| Non-interest current account deficit | 6.0 | 2.4 | 5.6 | 2.2 | 2.3 | 8.2 | 7.9 | 7.6 | 8.1 | 8.0 | 7.9 | 6.9 | 7.3 | 6.9 | |||||
| Deficit in balance of goods and services | 8.0 | 7.7 | 9.2 | 6.1 | 11.6 | 10.3 | 10.1 | 10.4 | 10.1 | 9.7 | 8.2 | 9.1 | 8.3 | ||||||
| Exports | 12.7 | 14.2 | 14.0 | 15.9 | 12.7 | 12.7 | 12.6 | 12.8 | 13.1 | 13.1 | 13.6 | 14.2 | 13.8 | ||||||
| Imports | 20.8 | 21.8 | 23.2 | 22.0 | 24.4 | 23.0 | 22.8 | 23.2 | 23.1 | 22.9 | 21.8 | 23.3 | 22.1 | ||||||
| Net current transfers (negative = inflow) | -2.3 | -5.5 | -3.7 | -3.8 | 1.2 | -3.8 | -2.9 | -2.8 | -2.7 | -2.6 | -2.6 | -2.4 | -2.3 | -2.3 | |||||
| Of which: official | -2.0 | -5.2 | -3.5 | -3.8 | -3.5 | -2.6 | -2.5 | -2.5 | -2.5 | -2.5 | -2.4 | -2.4 | -2.4 | ||||||
| Other current account flows (negative = net inflow) | 0.2 | 0.2 | 0.1 | -0.1 | 0.4 | 0.5 | 0.2 | 0.4 | 0.6 | 0.7 | 1.1 | 0.5 | 1.0 | ||||||
| Net FDI (negative = inflow) | -2.4 | -2.3 | -3.3 | -1.4 | 1.2 | -5.1 | -5.1 | -5.1 | -5.1 | -5.1 | -5.1 | -5.0 | -4.0 | -4.7 | |||||
| Endogenous debt dynamics2/ | -4.4 | -6.2 | -9.2 | -3.6 | -0.9 | -1.9 | -1.5 | -1.4 | -1.3 | -1.1 | -0.8 | -0.6 | -0.7 | ||||||
| Contribution from nominal interest rate | 0.5 | 0.6 | 0.4 | 0.9 | 0.7 | 0.6 | 0.8 | 0.7 | 0.5 | 0.5 | 0.2 | 0.2 | 0.2 | ||||||
| Contribution from real GDP growth | -1.8 | -3.0 | -2.5 | -0.6 | -1.6 | -2.5 | -2.3 | -2.0 | -1.8 | -1.6 | -1.0 | -0.7 | -0.9 | ||||||
| Contribution from price and exchange rate changes | -3.1 | -3.8 | -7.1 | -3.9 | … | … | … | … | … | … | … | … | … | ||||||
| Residual3/ | 3.7 | -5.6 | -8.8 | -1.4 | -1.4 | -5.3 | -7.3 | -6.4 | -6.0 | -6.3 | -2.7 | -1.5 | -2.6 | ||||||
| Of which: exceptional financing | -2.5 | 5.3 | -0.1 | 0.2 | -1.9 | -2.1 | -2.9 | -2.1 | -2.0 | -2.3 | -0.6 | -0.2 | -0.6 | ||||||
| PV of external debt 4/ | … | … | 41.3 | 36.5 | 38.2 | 33.7 | 30.2 | 26.9 | 23.0 | 14.1 | 9.0 | 11.9 | |||||||
| In percent of exports | … | … | 295.6 | 286.6 | 300.9 | 267.3 | 236.1 | 205.7 | 175.4 | 103.6 | 63.1 | 87.2 | |||||||
| PV of PPG external debt | … | … | 41.3 | 36.5 | 38.2 | 33.7 | 30.2 | 26.9 | 23.0 | 14.1 | 9.0 | 11.9 | |||||||
| In percent of exports | … | … | 295.6 | 286.6 | 300.9 | 267.3 | 236.1 | 205.7 | 175.4 | 103.6 | 63.1 | 87.2 | |||||||
| In percent of government revenues | … | … | 405.2 | 345.2 | 339.9 | 292.4 | 256.4 | 221.8 | 185.1 | 99.8 | 48.6 | 81.0 | |||||||
| Debt service-to-exports ratio (in percent) | 17.0 | 18.6 | 14.1 | 19.9 | 12.8 | 10.6 | 27.6 | 24.2 | 22.9 | 26.9 | 9.2 | 4.0 | 9.0 | ||||||
| PPG debt service-to-exports ratio (in percent) | 17.0 | 18.6 | 14.1 | 19.9 | 12.8 | 10.6 | 27.6 | 24.2 | 22.9 | 26.9 | 9.2 | 4.0 | 9.0 | ||||||
| PPG debt service-to-revenue ratio (in percent) | 26.3 | 27.8 | 19.4 | 34.4 | 15.4 | 12.0 | 30.1 | 26.3 | 24.7 | 28.4 | 8.8 | 3.1 | 8.5 | ||||||
| Total gross financing need (billions of U.S. dollars) | 0.1 | 0.0 | 0.1 | 0.0 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.1 | 0.3 | 0.2 | ||||||
| Non-interest current account deficit that stabilizes debt rati | 3.1 | 14.1 | 21.3 | 6.4 | 7.5 | 12.3 | 13.9 | 12.8 | 12.3 | 12.5 | 8.5 | 6.0 | 7.9 | ||||||
| Key macroeconomic assumptions | |||||||||||||||||||
| Real GDP growth (in percent) | 2.4 | 4.0 | 4.2 | 0.9 | 3.7 | 3.5 | 4.5 | 5.0 | 5.0 | 5.0 | 5.0 | 4.7 | 5.5 | 5.5 | 5.4 | ||||
| GDP deflator in US dollar terms (change in percent) | 4.1 | 4.9 | 11.3 | 5.1 | 7.2 | 12.5 | -6.1 | 2.8 | 2.8 | 2.8 | 2.9 | 2.9 | 2.4 | 2.4 | 2.4 | ||||
| Effective interest rate (percent) 5/ | 0.6 | 0.8 | 0.7 | 1.1 | 0.4 | 1.5 | 1.0 | 1.8 | 1.7 | 1.5 | 1.5 | 1.5 | 1.1 | 1.2 | 1.3 | ||||
| Growth of exports of G&S (US dollar terms, in percent) | -1.3 | 21.3 | 14.4 | 0.5 | 12.4 | 6.2 | -2.1 | 7.1 | 9.4 | 10.2 | 8.7 | 6.6 | 8.2 | 8.8 | 8.5 | ||||
| Growth of imports of G&S (US dollar terms, in percent) | 9.3 | 14.6 | 23.0 | 4.6 | 13.8 | 22.5 | -7.4 | 6.8 | 10.2 | 7.5 | 6.9 | 7.7 | 7.0 | 10.5 | 8.1 | ||||
| Grant element of new public sector borrowing (in percent) | … | … | … | … | … | 30.1 | 28.9 | 51.5 | 51.5 | 51.5 | 51.5 | 44.2 | 51.5 | 51.5 | 51.5 | ||||
| Government revenues (excluding grants, in percent of GDP | 8.2 | 9.5 | 10.2 | 10.6 | 11.2 | 11.5 | 11.8 | 12.1 | 12.5 | 14.1 | 18.5 | 15.4 | |||||||
| Aid flows (in billions of US dollars) 6/ | 0.1 | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.2 | 0.2 | 0.4 | 1.5 | ||||||||
| Of which: grants | 0.1 | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.3 | ||||||||
| Of which: concessional loans | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 | 0.1 | 0.1 | 0.2 | 1.2 | ||||||||
| Grant-equivalent financing (in percent of GDP) 7/ | … | … | … | 3.6 | 5.6 | 4.2 | 4.7 | 4.7 | 4.6 | 4.5 | 5.4 | 4.6 | |||||||
| Grant-equivalent financing (in percent of external financing | … | … | … | 80.5 | 91.6 | 100.0 | 90.6 | 90.6 | 90.5 | 90.3 | 80.4 | 88.3 | |||||||
| Memorandum items: | |||||||||||||||||||
| Nominal GDP (billions of US dollars) | 1.4 | 1.5 | 1.7 | 2.0 | 2.0 | 2.1 | 2.3 | 2.5 | 2.7 | 3.9 | 8.4 | ||||||||
| Nominal dollar GDP growth | 6.6 | 9.1 | 16.0 | 16.4 | -1.9 | 8.0 | 8.0 | 8.0 | 8.0 | 7.7 | 8.0 | 8.0 | 7.9 | ||||||
| PV of PPG external debt (in billions of US dollars) | … | … | 0.7 | 0.7 | 0.7 | 0.7 | 0.7 | 0.7 | 0.6 | 0.5 | 0.8 | ||||||||
| (PVt-PVt-1)/GDPt-1 (in percent) | 1.2 | 1.0 | -1.8 | -1.1 | -1.2 | -2.0 | -0.7 | -0.1 | 1.2 | 0.0 | |||||||||
Includes both public and private sector external debt.
Derived as [r - g - r(1+g)]/(1+g+r+gr) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and r = growth rate of GDP deflator in U.S. dollar terms.
Includes exceptional financing (i.e., changes in arrears and debt relief); changes in gross foreign assets; and valuation adjustments. For projections also includes contribution from price and exchange rate changes.
Assumes that PV of private sector debt is equivalent to its face value.
Current-year interest payments divided by previous period debt stock.
Defined as grants, concessional loans, and debt relief.
Grant-equivalent financing includes grants provided directly to the government and through new borrowing (difference between the face value and the PV of new debt).
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
Central African Republic: External Debt Sustainability Framework, Baseline Scenario, 2005-28 1/
(In percent of GDP, unless otherwise indicated)
| Actual | Historical Average 8/ | Standard Average 8/ | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2008-13 Average | 2018 | 2028 | 2014-28 Average | |||||||
| External debt (nominal) 1/ | 81.6 | 69.9 | 54.2 | 82.8 | 54.9 | 50.5 | 44.2 | 39.5 | 35.2 | 30.5 | 19.0 | 15.2 | 17.0 | ||||||
| Of which: public and publicly guaranteed (PPG) | 81.6 | 69.9 | 54.2 | 82.8 | 54.9 | 50.5 | 44.2 | 39.5 | 35.2 | 30.5 | 19.0 | 15.2 | 17.0 | ||||||
| Change in external debt | 2.8 | -11.7 | -15.7 | -4.2 | 0.8 | -4.4 | -6.4 | -4.7 | -4.4 | -4.6 | -1.5 | 1.2 | -1.0 | ||||||
| Identified net debt-creating flows | -0.8 | -6.1 | -6.9 | -2.8 | 2.2 | 0.9 | 1.0 | 1.7 | 1.6 | 1.6 | 1.1 | 2.7 | 1.6 | ||||||
| Non-interest current account deficit | 6.0 | 2.4 | 5.6 | 2.2 | 2.3 | 8.2 | 7.9 | 7.6 | 8.1 | 8.0 | 7.9 | 6.9 | 7.3 | 6.9 | |||||
| Deficit in balance of goods and services | 8.0 | 7.7 | 9.2 | 6.1 | 11.6 | 10.3 | 10.1 | 10.4 | 10.1 | 9.7 | 8.2 | 9.1 | 8.3 | ||||||
| Exports | 12.7 | 14.2 | 14.0 | 15.9 | 12.7 | 12.7 | 12.6 | 12.8 | 13.1 | 13.1 | 13.6 | 14.2 | 13.8 | ||||||
| Imports | 20.8 | 21.8 | 23.2 | 22.0 | 24.4 | 23.0 | 22.8 | 23.2 | 23.1 | 22.9 | 21.8 | 23.3 | 22.1 | ||||||
| Net current transfers (negative = inflow) | -2.3 | -5.5 | -3.7 | -3.8 | 1.2 | -3.8 | -2.9 | -2.8 | -2.7 | -2.6 | -2.6 | -2.4 | -2.3 | -2.3 | |||||
| Of which: official | -2.0 | -5.2 | -3.5 | -3.8 | -3.5 | -2.6 | -2.5 | -2.5 | -2.5 | -2.5 | -2.4 | -2.4 | -2.4 | ||||||
| Other current account flows (negative = net inflow) | 0.2 | 0.2 | 0.1 | -0.1 | 0.4 | 0.5 | 0.2 | 0.4 | 0.6 | 0.7 | 1.1 | 0.5 | 1.0 | ||||||
| Net FDI (negative = inflow) | -2.4 | -2.3 | -3.3 | -1.4 | 1.2 | -5.1 | -5.1 | -5.1 | -5.1 | -5.1 | -5.1 | -5.0 | -4.0 | -4.7 | |||||
| Endogenous debt dynamics2/ | -4.4 | -6.2 | -9.2 | -3.6 | -0.9 | -1.9 | -1.5 | -1.4 | -1.3 | -1.1 | -0.8 | -0.6 | -0.7 | ||||||
| Contribution from nominal interest rate | 0.5 | 0.6 | 0.4 | 0.9 | 0.7 | 0.6 | 0.8 | 0.7 | 0.5 | 0.5 | 0.2 | 0.2 | 0.2 | ||||||
| Contribution from real GDP growth | -1.8 | -3.0 | -2.5 | -0.6 | -1.6 | -2.5 | -2.3 | -2.0 | -1.8 | -1.6 | -1.0 | -0.7 | -0.9 | ||||||
| Contribution from price and exchange rate changes | -3.1 | -3.8 | -7.1 | -3.9 | … | … | … | … | … | … | … | … | … | ||||||
| Residual3/ | 3.7 | -5.6 | -8.8 | -1.4 | -1.4 | -5.3 | -7.3 | -6.4 | -6.0 | -6.3 | -2.7 | -1.5 | -2.6 | ||||||
| Of which: exceptional financing | -2.5 | 5.3 | -0.1 | 0.2 | -1.9 | -2.1 | -2.9 | -2.1 | -2.0 | -2.3 | -0.6 | -0.2 | -0.6 | ||||||
| PV of external debt 4/ | … | … | 41.3 | 36.5 | 38.2 | 33.7 | 30.2 | 26.9 | 23.0 | 14.1 | 9.0 | 11.9 | |||||||
| In percent of exports | … | … | 295.6 | 286.6 | 300.9 | 267.3 | 236.1 | 205.7 | 175.4 | 103.6 | 63.1 | 87.2 | |||||||
| PV of PPG external debt | … | … | 41.3 | 36.5 | 38.2 | 33.7 | 30.2 | 26.9 | 23.0 | 14.1 | 9.0 | 11.9 | |||||||
| In percent of exports | … | … | 295.6 | 286.6 | 300.9 | 267.3 | 236.1 | 205.7 | 175.4 | 103.6 | 63.1 | 87.2 | |||||||
| In percent of government revenues | … | … | 405.2 | 345.2 | 339.9 | 292.4 | 256.4 | 221.8 | 185.1 | 99.8 | 48.6 | 81.0 | |||||||
| Debt service-to-exports ratio (in percent) | 17.0 | 18.6 | 14.1 | 19.9 | 12.8 | 10.6 | 27.6 | 24.2 | 22.9 | 26.9 | 9.2 | 4.0 | 9.0 | ||||||
| PPG debt service-to-exports ratio (in percent) | 17.0 | 18.6 | 14.1 | 19.9 | 12.8 | 10.6 | 27.6 | 24.2 | 22.9 | 26.9 | 9.2 | 4.0 | 9.0 | ||||||
| PPG debt service-to-revenue ratio (in percent) | 26.3 | 27.8 | 19.4 | 34.4 | 15.4 | 12.0 | 30.1 | 26.3 | 24.7 | 28.4 | 8.8 | 3.1 | 8.5 | ||||||
| Total gross financing need (billions of U.S. dollars) | 0.1 | 0.0 | 0.1 | 0.0 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.1 | 0.3 | 0.2 | ||||||
| Non-interest current account deficit that stabilizes debt rati | 3.1 | 14.1 | 21.3 | 6.4 | 7.5 | 12.3 | 13.9 | 12.8 | 12.3 | 12.5 | 8.5 | 6.0 | 7.9 | ||||||
| Key macroeconomic assumptions | |||||||||||||||||||
| Real GDP growth (in percent) | 2.4 | 4.0 | 4.2 | 0.9 | 3.7 | 3.5 | 4.5 | 5.0 | 5.0 | 5.0 | 5.0 | 4.7 | 5.5 | 5.5 | 5.4 | ||||
| GDP deflator in US dollar terms (change in percent) | 4.1 | 4.9 | 11.3 | 5.1 | 7.2 | 12.5 | -6.1 | 2.8 | 2.8 | 2.8 | 2.9 | 2.9 | 2.4 | 2.4 | 2.4 | ||||
| Effective interest rate (percent) 5/ | 0.6 | 0.8 | 0.7 | 1.1 | 0.4 | 1.5 | 1.0 | 1.8 | 1.7 | 1.5 | 1.5 | 1.5 | 1.1 | 1.2 | 1.3 | ||||
| Growth of exports of G&S (US dollar terms, in percent) | -1.3 | 21.3 | 14.4 | 0.5 | 12.4 | 6.2 | -2.1 | 7.1 | 9.4 | 10.2 | 8.7 | 6.6 | 8.2 | 8.8 | 8.5 | ||||
| Growth of imports of G&S (US dollar terms, in percent) | 9.3 | 14.6 | 23.0 | 4.6 | 13.8 | 22.5 | -7.4 | 6.8 | 10.2 | 7.5 | 6.9 | 7.7 | 7.0 | 10.5 | 8.1 | ||||
| Grant element of new public sector borrowing (in percent) | … | … | … | … | … | 30.1 | 28.9 | 51.5 | 51.5 | 51.5 | 51.5 | 44.2 | 51.5 | 51.5 | 51.5 | ||||
| Government revenues (excluding grants, in percent of GDP | 8.2 | 9.5 | 10.2 | 10.6 | 11.2 | 11.5 | 11.8 | 12.1 | 12.5 | 14.1 | 18.5 | 15.4 | |||||||
| Aid flows (in billions of US dollars) 6/ | 0.1 | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.2 | 0.2 | 0.4 | 1.5 | ||||||||
| Of which: grants | 0.1 | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.3 | ||||||||
| Of which: concessional loans | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 | 0.1 | 0.1 | 0.2 | 1.2 | ||||||||
| Grant-equivalent financing (in percent of GDP) 7/ | … | … | … | 3.6 | 5.6 | 4.2 | 4.7 | 4.7 | 4.6 | 4.5 | 5.4 | 4.6 | |||||||
| Grant-equivalent financing (in percent of external financing | … | … | … | 80.5 | 91.6 | 100.0 | 90.6 | 90.6 | 90.5 | 90.3 | 80.4 | 88.3 | |||||||
| Memorandum items: | |||||||||||||||||||
| Nominal GDP (billions of US dollars) | 1.4 | 1.5 | 1.7 | 2.0 | 2.0 | 2.1 | 2.3 | 2.5 | 2.7 | 3.9 | 8.4 | ||||||||
| Nominal dollar GDP growth | 6.6 | 9.1 | 16.0 | 16.4 | -1.9 | 8.0 | 8.0 | 8.0 | 8.0 | 7.7 | 8.0 | 8.0 | 7.9 | ||||||
| PV of PPG external debt (in billions of US dollars) | … | … | 0.7 | 0.7 | 0.7 | 0.7 | 0.7 | 0.7 | 0.6 | 0.5 | 0.8 | ||||||||
| (PVt-PVt-1)/GDPt-1 (in percent) | 1.2 | 1.0 | -1.8 | -1.1 | -1.2 | -2.0 | -0.7 | -0.1 | 1.2 | 0.0 | |||||||||
Includes both public and private sector external debt.
Derived as [r - g - r(1+g)]/(1+g+r+gr) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and r = growth rate of GDP deflator in U.S. dollar terms.
Includes exceptional financing (i.e., changes in arrears and debt relief); changes in gross foreign assets; and valuation adjustments. For projections also includes contribution from price and exchange rate changes.
Assumes that PV of private sector debt is equivalent to its face value.
Current-year interest payments divided by previous period debt stock.
Defined as grants, concessional loans, and debt relief.
Grant-equivalent financing includes grants provided directly to the government and through new borrowing (difference between the face value and the PV of new debt).
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
7. These ratios decline gradually through 2028. Compared to the previous joint DSA, all external debt indicators for 2008 improve because of higher nominal GDP in local currency terms and the appreciation of the CFA franc (pegged to the euro) against the U.S. dollar. However, the NPV of external debt-to-export ratio would not improve as much as the other indicators; it stays above the threshold (100 percent) until 2018 because of lower export proceeds. The NPV of external PPG debt-to-revenue ratio, on the other hand, is projected to decline faster because of an expected improvement in revenue collection. The debt service indicators—relative to both exports and revenue—are more favorable, indicating adequate capacity to repay debt. However, given the accumulation of arrears in the past and the high debt service burden relative to exports in the initial periods, firm management of cash flows would be required to ensure timely debt service.
B. Alternative Scenarios and Stress Tests6
8. The historical scenario produces more favorable paths for debt indicators than the baseline scenario (Table 1b). The historical average over the past 10 years for the noninterest current account deficit is 2.2 percent of GDP, which is significantly better than the projected deficit of 7.2 percent in the baseline. On the other hand, real GDP and export growth were much less favorable in the past than what the baseline scenario assumes: real GDP growth of 0.9 percent over the past 10 years against 5.2 percent projected for the next 20; export growth of 0.5 percent over the past 10 years against 8.0 percent projected for the next 20. On balance, the staffs consider the macroeconomic projections in the baseline scenario to be realistic.
Central African Republic: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2008-28
(In percent)
Variables include real GDP growth, growth of GDP deflator (in U.S. dollar terms), non-interest current account in percent of GDP, and non-debt creating flows.
Assumes that the interest rate on new borrowing is by 2 percentage points higher than in the baseline, while grace and maturity periods are the same as in the baseline.
Exports values are assumed to remain permanently at the lower level, but the current account as a share of GDP is assumed to return to its baseline level after the shock (implicitly assuming an offsetting adjustment in import levels).
Includes official and private transfers and FDI.
Depreciation is defined as percentage decline in dollar/local currency rate, such that it never exceeds 100 percent.
Applies to all stress scenarios except for A2 (less favorable financing) in which the terms on all new financing are as specified in footnote 2.
Central African Republic: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2008-28
(In percent)
| Projections | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | |
| PV of debt-to GDP ratio | |||||||||||||||||||||
| Baseline | 36 | 38 | 34 | 30 | 27 | 23 | 20 | 18 | 17 | 15 | 14 | 13 | 12 | 11 | 9 | 8 | 8 | 8 | 8 | 8 | 9 |
| A. Alternative Scenarios | |||||||||||||||||||||
| A1. Key variables at their historical averages in 2008-2028 1/ | 36 | 34 | 30 | 26 | 22 | 18 | 14 | 12 | 10 | 8 | 7 | 5 | 4 | 3 | 2 | 1 | 0 | 0 | 0 | 0 | -1 |
| A2. New public sector loans on less favorable terms in 2008-2028 2/ | 36 | 38 | 34 | 30 | 27 | 23 | 20 | 18 | 17 | 16 | 14 | 13 | 12 | 11 | 10 | 9 | 8 | 8 | 8 | 9 | 9 |
| A3. Full delivery of HIPC assistance and MDRI | 16 | 16 | 15 | 14 | 13 | 12 | 11 | 10 | 10 | 9 | 9 | 8 | 8 | 8 | 7 | 7 | 7 | 7 | 7 | 8 | 8 |
| B. Bound Tests | |||||||||||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2009-2010 | 36 | 41 | 39 | 35 | 31 | 27 | 23 | 21 | 19 | 18 | 16 | 15 | 14 | 13 | 11 | 10 | 9 | 9 | 9 | 10 | 10 |
| B2. Export value growth at historical average minus one standard deviation in 2009-2010 3/ | 36 | 39 | 36 | 32 | 29 | 25 | 22 | 20 | 18 | 17 | 16 | 14 | 13 | 12 | 11 | 10 | 9 | 9 | 9 | 9 | 10 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2009-2010 | 36 | 37 | 34 | 30 | 27 | 23 | 20 | 18 | 17 | 15 | 14 | 13 | 12 | 11 | 9 | 9 | 8 | 8 | 8 | 9 | 9 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2009-2010 4/ | 36 | 41 | 39 | 35 | 32 | 28 | 24 | 22 | 21 | 19 | 18 | 16 | 15 | 14 | 12 | 11 | 10 | 10 | 10 | 10 | 10 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 36 | 39 | 41 | 37 | 33 | 29 | 25 | 24 | 22 | 20 | 19 | 17 | 16 | 15 | 13 | 11 | 11 | 10 | 10 | 10 | 11 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2009 5/ | 36 | 56 | 50 | 44 | 39 | 34 | 29 | 27 | 24 | 22 | 21 | 19 | 17 | 16 | 14 | 12 | 12 | 12 | 12 | 12 | 13 |
| PV of debt-to-exports ratio | |||||||||||||||||||||
| Baseline | 287 | 301 | 267 | 236 | 206 | 175 | 150 | 136 | 123 | 113 | 104 | 93 | 85 | 79 | 68 | 61 | 58 | 57 | 57 | 60 | 63 |
| A. Alternative Scenarios | |||||||||||||||||||||
| A1. Key variables at their historical averages in 2008-2028 1/ | 287 | 268 | 234 | 200 | 167 | 134 | 105 | 88 | 73 | 61 | 51 | 39 | 31 | 24 | 12 | 5 | 0 | -1 | -3 | -3 | -4 |
| A2. New public sector loans on less favorable terms in 2008-2028 2/ | 287 | 299 | 266 | 235 | 205 | 175 | 150 | 137 | 125 | 115 | 107 | 96 | 88 | 81 | 70 | 63 | 60 | 60 | 60 | 63 | 66 |
| A3. Full delivery of HIPC assistance and MDRI | 125 | 128 | 121 | 112 | 102 | 93 | 85 | 76 | 71 | 66 | 62 | 60 | 58 | 56 | 51 | 49 | 48 | 49 | 51 | 55 | 59 |
| B. Bound Tests | |||||||||||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2009-2010 | 287 | 301 | 267 | 236 | 206 | 175 | 150 | 136 | 123 | 112 | 103 | 93 | 85 | 79 | 68 | 61 | 58 | 57 | 57 | 60 | 63 |
| B2. Export value growth at historical average minus one standard deviation in 2009-2010 3/ | 287 | 340 | 385 | 342 | 299 | 258 | 222 | 203 | 185 | 170 | 157 | 142 | 130 | 120 | 103 | 93 | 87 | 86 | 84 | 87 | 91 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2009-2010 | 287 | 301 | 267 | 236 | 206 | 175 | 150 | 136 | 123 | 112 | 103 | 93 | 85 | 79 | 68 | 61 | 58 | 57 | 57 | 60 | 63 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2009-2010 4/ | 287 | 321 | 307 | 274 | 242 | 210 | 183 | 168 | 154 | 142 | 132 | 120 | 109 | 100 | 87 | 78 | 72 | 70 | 69 | 70 | 72 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 287 | 330 | 363 | 324 | 285 | 248 | 216 | 199 | 182 | 168 | 156 | 142 | 129 | 118 | 102 | 92 | 86 | 83 | 81 | 83 | 85 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2009 5/ | 287 | 301 | 267 | 236 | 206 | 175 | 150 | 136 | 123 | 112 | 103 | 93 | 85 | 79 | 68 | 61 | 58 | 57 | 57 | 60 | 63 |
| PV of debt-to-revenue ratio | |||||||||||||||||||||
| Baseline | 345 | 340 | 292 | 256 | 222 | 185 | 155 | 138 | 123 | 111 | 100 | 88 | 79 | 71 | 60 | 53 | 48 | 47 | 46 | 47 | 49 |
| A. Alternative Scenarios | |||||||||||||||||||||
| A1. Key variables at their historical averages in 2008-2028 1/ | 345 | 303 | 256 | 217 | 180 | 141 | 109 | 90 | 73 | 60 | 49 | 37 | 28 | 21 | 11 | 5 | 0 | 0 | -2 | -2 | -3 |
| A2. New public sector loans on less favorable terms in 2008-2028 2/ | 345 | 338 | 291 | 255 | 221 | 184 | 155 | 139 | 125 | 113 | 103 | 91 | 81 | 73 | 62 | 54 | 50 | 49 | 48 | 49 | 51 |
| A3. Full delivery of HIPC assistance and MDRI | 151 | 144 | 132 | 121 | 110 | 98 | 88 | 77 | 71 | 65 | 60 | 56 | 53 | 50 | 45 | 42 | 40 | 40 | 41 | 43 | 45 |
| B. Bound Tests | |||||||||||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2009-2010 | 345 | 365 | 339 | 297 | 257 | 214 | 180 | 160 | 143 | 128 | 116 | 102 | 91 | 82 | 69 | 61 | 56 | 55 | 53 | 55 | 56 |
| B2. Export value growth at historical average minus one standard deviation in 2009-2010 3/ | 345 | 345 | 312 | 275 | 239 | 201 | 170 | 153 | 137 | 124 | 112 | 99 | 89 | 80 | 67 | 59 | 54 | 52 | 50 | 51 | 52 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2009-2010 | 345 | 326 | 294 | 258 | 223 | 186 | 156 | 139 | 124 | 111 | 100 | 88 | 79 | 72 | 60 | 53 | 49 | 47 | 46 | 47 | 49 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2009-2010 4/ | 345 | 363 | 336 | 298 | 261 | 222 | 189 | 171 | 154 | 139 | 127 | 113 | 101 | 90 | 76 | 67 | 61 | 58 | 55 | 55 | 55 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 345 | 350 | 353 | 312 | 273 | 232 | 199 | 179 | 162 | 146 | 133 | 119 | 106 | 95 | 80 | 70 | 64 | 61 | 58 | 58 | 58 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2009 5/ | 345 | 499 | 430 | 377 | 326 | 272 | 228 | 203 | 181 | 162 | 146 | 129 | 116 | 105 | 88 | 77 | 71 | 69 | 67 | 69 | 71 |
| Debt service-to-exports ratio | |||||||||||||||||||||
| Baseline | 13 | 11 | 28 | 24 | 23 | 27 | 24 | 13 | 12 | 10 | 9 | 11 | 8 | 7 | 12 | 8 | 6 | 4 | 5 | 3 | 4 |
| A. Alternative Scenarios | |||||||||||||||||||||
| A1. Key variables at their historical averages in 2008-2028 1/ | 13 | 10 | 26 | 23 | 22 | 26 | 23 | 12 | 11 | 10 | 9 | 10 | 8 | 6 | 11 | 7 | 4 | 1 | 2 | 0 | 1 |
| A2. New public sector loans on less favorable terms in 2008-2028 2/ | 13 | 11 | 28 | 24 | 23 | 27 | 23 | 11 | 11 | 9 | 9 | 11 | 9 | 8 | 13 | 9 | 6 | 4 | 5 | 4 | 5 |
| A3. Full delivery of HIPC assistance and MDRI | 13 | 11 | 4 | 8 | 8 | 10 | 9 | 10 | 6 | 6 | 5 | 4 | 3 | 4 | 6 | 4 | 4 | 3 | 3 | 2 | 3 |
| B. Bound Tests | |||||||||||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2009-2010 | 13 | 11 | 28 | 24 | 23 | 27 | 24 | 13 | 12 | 10 | 9 | 11 | 8 | 7 | 12 | 8 | 6 | 4 | 5 | 3 | 4 |
| B2. Export value growth at historical average minus one standard deviation in 2009-2010 3/ | 13 | 12 | 37 | 33 | 31 | 37 | 32 | 17 | 16 | 14 | 13 | 15 | 12 | 11 | 17 | 12 | 9 | 6 | 7 | 5 | 6 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2009-2010 | 13 | 11 | 28 | 24 | 23 | 27 | 24 | 13 | 12 | 10 | 9 | 11 | 8 | 7 | 12 | 8 | 6 | 4 | 5 | 3 | 4 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2009-2010 4/ | 13 | 11 | 28 | 25 | 23 | 27 | 24 | 13 | 12 | 10 | 10 | 12 | 10 | 9 | 14 | 10 | 7 | 5 | 6 | 4 | 5 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 13 | 11 | 33 | 29 | 28 | 32 | 28 | 15 | 14 | 12 | 11 | 14 | 12 | 11 | 16 | 12 | 9 | 6 | 7 | 5 | 6 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2009 5/ | 13 | 11 | 28 | 24 | 23 | 27 | 24 | 13 | 12 | 10 | 9 | 11 | 8 | 7 | 12 | 8 | 6 | 4 | 5 | 3 | 4 |
| Debt service-to-revenue ratio | |||||||||||||||||||||
| Baseline | 15 | 12 | 30 | 26 | 25 | 28 | 24 | 13 | 12 | 10 | 9 | 10 | 8 | 7 | 11 | 7 | 5 | 3 | 4 | 3 | 3 |
| A. Alternative Scenarios | |||||||||||||||||||||
| A1. Key variables at their historical averages in 2008-2028 1/ | 15 | 11 | 28 | 25 | 24 | 28 | 24 | 12 | 11 | 10 | 9 | 10 | 7 | 6 | 10 | 6 | 3 | 1 | 2 | 0 | 1 |
| A2. New public sector loans on less favorable terms in 2008-2028 2/ | 15 | 12 | 30 | 26 | 25 | 29 | 24 | 11 | 11 | 9 | 8 | 10 | 8 | 7 | 11 | 8 | 5 | 3 | 4 | 3 | 4 |
| A3. Full delivery of HIPC assistance and MDRI | 15 | 12 | 5 | 9 | 8 | 10 | 9 | 10 | 6 | 6 | 5 | 4 | 3 | 3 | 5 | 4 | 3 | 2 | 3 | 2 | 2 |
| B. Bound Tests | |||||||||||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2009-2010 | 15 | 13 | 35 | 30 | 29 | 33 | 28 | 15 | 14 | 11 | 10 | 12 | 9 | 8 | 12 | 8 | 6 | 3 | 4 | 3 | 4 |
| B2. Export value growth at historical average minus one standard deviation in 2009-2010 3/ | 15 | 12 | 30 | 27 | 25 | 29 | 25 | 13 | 12 | 10 | 9 | 10 | 8 | 7 | 11 | 8 | 5 | 3 | 4 | 3 | 3 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2009-2010 | 15 | 11 | 30 | 26 | 25 | 29 | 25 | 13 | 12 | 10 | 9 | 10 | 8 | 7 | 11 | 7 | 5 | 3 | 4 | 3 | 3 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2009-2010 4/ | 15 | 12 | 30 | 27 | 25 | 29 | 25 | 13 | 12 | 10 | 9 | 11 | 10 | 8 | 12 | 8 | 6 | 4 | 5 | 3 | 4 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 15 | 12 | 32 | 28 | 26 | 30 | 26 | 14 | 13 | 11 | 10 | 12 | 10 | 9 | 13 | 9 | 6 | 4 | 5 | 4 | 4 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2009 5/ | 15 | 18 | 44 | 39 | 36 | 42 | 36 | 19 | 17 | 15 | 13 | 15 | 11 | 10 | 16 | 10 | 7 | 4 | 6 | 4 | 5 |
| Memorandum item: | |||||||||||||||||||||
| Grant element assumed on residual financing (i.e., financing required above baseline) 6/ | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 |
Variables include real GDP growth, growth of GDP deflator (in U.S. dollar terms), non-interest current account in percent of GDP, and non-debt creating flows.
Assumes that the interest rate on new borrowing is by 2 percentage points higher than in the baseline, while grace and maturity periods are the same as in the baseline.
Exports values are assumed to remain permanently at the lower level, but the current account as a share of GDP is assumed to return to its baseline level after the shock (implicitly assuming an offsetting adjustment in import levels).
Includes official and private transfers and FDI.
Depreciation is defined as percentage decline in dollar/local currency rate, such that it never exceeds 100 percent.
Applies to all stress scenarios except for A2 (less favorable financing) in which the terms on all new financing are as specified in footnote 2.
Central African Republic: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2008-28
(In percent)
| Projections | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | |
| PV of debt-to GDP ratio | |||||||||||||||||||||
| Baseline | 36 | 38 | 34 | 30 | 27 | 23 | 20 | 18 | 17 | 15 | 14 | 13 | 12 | 11 | 9 | 8 | 8 | 8 | 8 | 8 | 9 |
| A. Alternative Scenarios | |||||||||||||||||||||
| A1. Key variables at their historical averages in 2008-2028 1/ | 36 | 34 | 30 | 26 | 22 | 18 | 14 | 12 | 10 | 8 | 7 | 5 | 4 | 3 | 2 | 1 | 0 | 0 | 0 | 0 | -1 |
| A2. New public sector loans on less favorable terms in 2008-2028 2/ | 36 | 38 | 34 | 30 | 27 | 23 | 20 | 18 | 17 | 16 | 14 | 13 | 12 | 11 | 10 | 9 | 8 | 8 | 8 | 9 | 9 |
| A3. Full delivery of HIPC assistance and MDRI | 16 | 16 | 15 | 14 | 13 | 12 | 11 | 10 | 10 | 9 | 9 | 8 | 8 | 8 | 7 | 7 | 7 | 7 | 7 | 8 | 8 |
| B. Bound Tests | |||||||||||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2009-2010 | 36 | 41 | 39 | 35 | 31 | 27 | 23 | 21 | 19 | 18 | 16 | 15 | 14 | 13 | 11 | 10 | 9 | 9 | 9 | 10 | 10 |
| B2. Export value growth at historical average minus one standard deviation in 2009-2010 3/ | 36 | 39 | 36 | 32 | 29 | 25 | 22 | 20 | 18 | 17 | 16 | 14 | 13 | 12 | 11 | 10 | 9 | 9 | 9 | 9 | 10 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2009-2010 | 36 | 37 | 34 | 30 | 27 | 23 | 20 | 18 | 17 | 15 | 14 | 13 | 12 | 11 | 9 | 9 | 8 | 8 | 8 | 9 | 9 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2009-2010 4/ | 36 | 41 | 39 | 35 | 32 | 28 | 24 | 22 | 21 | 19 | 18 | 16 | 15 | 14 | 12 | 11 | 10 | 10 | 10 | 10 | 10 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 36 | 39 | 41 | 37 | 33 | 29 | 25 | 24 | 22 | 20 | 19 | 17 | 16 | 15 | 13 | 11 | 11 | 10 | 10 | 10 | 11 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2009 5/ | 36 | 56 | 50 | 44 | 39 | 34 | 29 | 27 | 24 | 22 | 21 | 19 | 17 | 16 | 14 | 12 | 12 | 12 | 12 | 12 | 13 |
| PV of debt-to-exports ratio | |||||||||||||||||||||
| Baseline | 287 | 301 | 267 | 236 | 206 | 175 | 150 | 136 | 123 | 113 | 104 | 93 | 85 | 79 | 68 | 61 | 58 | 57 | 57 | 60 | 63 |
| A. Alternative Scenarios | |||||||||||||||||||||
| A1. Key variables at their historical averages in 2008-2028 1/ | 287 | 268 | 234 | 200 | 167 | 134 | 105 | 88 | 73 | 61 | 51 | 39 | 31 | 24 | 12 | 5 | 0 | -1 | -3 | -3 | -4 |
| A2. New public sector loans on less favorable terms in 2008-2028 2/ | 287 | 299 | 266 | 235 | 205 | 175 | 150 | 137 | 125 | 115 | 107 | 96 | 88 | 81 | 70 | 63 | 60 | 60 | 60 | 63 | 66 |
| A3. Full delivery of HIPC assistance and MDRI | 125 | 128 | 121 | 112 | 102 | 93 | 85 | 76 | 71 | 66 | 62 | 60 | 58 | 56 | 51 | 49 | 48 | 49 | 51 | 55 | 59 |
| B. Bound Tests | |||||||||||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2009-2010 | 287 | 301 | 267 | 236 | 206 | 175 | 150 | 136 | 123 | 112 | 103 | 93 | 85 | 79 | 68 | 61 | 58 | 57 | 57 | 60 | 63 |
| B2. Export value growth at historical average minus one standard deviation in 2009-2010 3/ | 287 | 340 | 385 | 342 | 299 | 258 | 222 | 203 | 185 | 170 | 157 | 142 | 130 | 120 | 103 | 93 | 87 | 86 | 84 | 87 | 91 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2009-2010 | 287 | 301 | 267 | 236 | 206 | 175 | 150 | 136 | 123 | 112 | 103 | 93 | 85 | 79 | 68 | 61 | 58 | 57 | 57 | 60 | 63 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2009-2010 4/ | 287 | 321 | 307 | 274 | 242 | 210 | 183 | 168 | 154 | 142 | 132 | 120 | 109 | 100 | 87 | 78 | 72 | 70 | 69 | 70 | 72 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 287 | 330 | 363 | 324 | 285 | 248 | 216 | 199 | 182 | 168 | 156 | 142 | 129 | 118 | 102 | 92 | 86 | 83 | 81 | 83 | 85 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2009 5/ | 287 | 301 | 267 | 236 | 206 | 175 | 150 | 136 | 123 | 112 | 103 | 93 | 85 | 79 | 68 | 61 | 58 | 57 | 57 | 60 | 63 |
| PV of debt-to-revenue ratio | |||||||||||||||||||||
| Baseline | 345 | 340 | 292 | 256 | 222 | 185 | 155 | 138 | 123 | 111 | 100 | 88 | 79 | 71 | 60 | 53 | 48 | 47 | 46 | 47 | 49 |
| A. Alternative Scenarios | |||||||||||||||||||||
| A1. Key variables at their historical averages in 2008-2028 1/ | 345 | 303 | 256 | 217 | 180 | 141 | 109 | 90 | 73 | 60 | 49 | 37 | 28 | 21 | 11 | 5 | 0 | 0 | -2 | -2 | -3 |
| A2. New public sector loans on less favorable terms in 2008-2028 2/ | 345 | 338 | 291 | 255 | 221 | 184 | 155 | 139 | 125 | 113 | 103 | 91 | 81 | 73 | 62 | 54 | 50 | 49 | 48 | 49 | 51 |
| A3. Full delivery of HIPC assistance and MDRI | 151 | 144 | 132 | 121 | 110 | 98 | 88 | 77 | 71 | 65 | 60 | 56 | 53 | 50 | 45 | 42 | 40 | 40 | 41 | 43 | 45 |
| B. Bound Tests | |||||||||||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2009-2010 | 345 | 365 | 339 | 297 | 257 | 214 | 180 | 160 | 143 | 128 | 116 | 102 | 91 | 82 | 69 | 61 | 56 | 55 | 53 | 55 | 56 |
| B2. Export value growth at historical average minus one standard deviation in 2009-2010 3/ | 345 | 345 | 312 | 275 | 239 | 201 | 170 | 153 | 137 | 124 | 112 | 99 | 89 | 80 | 67 | 59 | 54 | 52 | 50 | 51 | 52 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2009-2010 | 345 | 326 | 294 | 258 | 223 | 186 | 156 | 139 | 124 | 111 | 100 | 88 | 79 | 72 | 60 | 53 | 49 | 47 | 46 | 47 | 49 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2009-2010 4/ | 345 | 363 | 336 | 298 | 261 | 222 | 189 | 171 | 154 | 139 | 127 | 113 | 101 | 90 | 76 | 67 | 61 | 58 | 55 | 55 | 55 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 345 | 350 | 353 | 312 | 273 | 232 | 199 | 179 | 162 | 146 | 133 | 119 | 106 | 95 | 80 | 70 | 64 | 61 | 58 | 58 | 58 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2009 5/ | 345 | 499 | 430 | 377 | 326 | 272 | 228 | 203 | 181 | 162 | 146 | 129 | 116 | 105 | 88 | 77 | 71 | 69 | 67 | 69 | 71 |
| Debt service-to-exports ratio | |||||||||||||||||||||
| Baseline | 13 | 11 | 28 | 24 | 23 | 27 | 24 | 13 | 12 | 10 | 9 | 11 | 8 | 7 | 12 | 8 | 6 | 4 | 5 | 3 | 4 |
| A. Alternative Scenarios | |||||||||||||||||||||
| A1. Key variables at their historical averages in 2008-2028 1/ | 13 | 10 | 26 | 23 | 22 | 26 | 23 | 12 | 11 | 10 | 9 | 10 | 8 | 6 | 11 | 7 | 4 | 1 | 2 | 0 | 1 |
| A2. New public sector loans on less favorable terms in 2008-2028 2/ | 13 | 11 | 28 | 24 | 23 | 27 | 23 | 11 | 11 | 9 | 9 | 11 | 9 | 8 | 13 | 9 | 6 | 4 | 5 | 4 | 5 |
| A3. Full delivery of HIPC assistance and MDRI | 13 | 11 | 4 | 8 | 8 | 10 | 9 | 10 | 6 | 6 | 5 | 4 | 3 | 4 | 6 | 4 | 4 | 3 | 3 | 2 | 3 |
| B. Bound Tests | |||||||||||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2009-2010 | 13 | 11 | 28 | 24 | 23 | 27 | 24 | 13 | 12 | 10 | 9 | 11 | 8 | 7 | 12 | 8 | 6 | 4 | 5 | 3 | 4 |
| B2. Export value growth at historical average minus one standard deviation in 2009-2010 3/ | 13 | 12 | 37 | 33 | 31 | 37 | 32 | 17 | 16 | 14 | 13 | 15 | 12 | 11 | 17 | 12 | 9 | 6 | 7 | 5 | 6 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2009-2010 | 13 | 11 | 28 | 24 | 23 | 27 | 24 | 13 | 12 | 10 | 9 | 11 | 8 | 7 | 12 | 8 | 6 | 4 | 5 | 3 | 4 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2009-2010 4/ | 13 | 11 | 28 | 25 | 23 | 27 | 24 | 13 | 12 | 10 | 10 | 12 | 10 | 9 | 14 | 10 | 7 | 5 | 6 | 4 | 5 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 13 | 11 | 33 | 29 | 28 | 32 | 28 | 15 | 14 | 12 | 11 | 14 | 12 | 11 | 16 | 12 | 9 | 6 | 7 | 5 | 6 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2009 5/ | 13 | 11 | 28 | 24 | 23 | 27 | 24 | 13 | 12 | 10 | 9 | 11 | 8 | 7 | 12 | 8 | 6 | 4 | 5 | 3 | 4 |
| Debt service-to-revenue ratio | |||||||||||||||||||||
| Baseline | 15 | 12 | 30 | 26 | 25 | 28 | 24 | 13 | 12 | 10 | 9 | 10 | 8 | 7 | 11 | 7 | 5 | 3 | 4 | 3 | 3 |
| A. Alternative Scenarios | |||||||||||||||||||||
| A1. Key variables at their historical averages in 2008-2028 1/ | 15 | 11 | 28 | 25 | 24 | 28 | 24 | 12 | 11 | 10 | 9 | 10 | 7 | 6 | 10 | 6 | 3 | 1 | 2 | 0 | 1 |
| A2. New public sector loans on less favorable terms in 2008-2028 2/ | 15 | 12 | 30 | 26 | 25 | 29 | 24 | 11 | 11 | 9 | 8 | 10 | 8 | 7 | 11 | 8 | 5 | 3 | 4 | 3 | 4 |
| A3. Full delivery of HIPC assistance and MDRI | 15 | 12 | 5 | 9 | 8 | 10 | 9 | 10 | 6 | 6 | 5 | 4 | 3 | 3 | 5 | 4 | 3 | 2 | 3 | 2 | 2 |
| B. Bound Tests | |||||||||||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2009-2010 | 15 | 13 | 35 | 30 | 29 | 33 | 28 | 15 | 14 | 11 | 10 | 12 | 9 | 8 | 12 | 8 | 6 | 3 | 4 | 3 | 4 |
| B2. Export value growth at historical average minus one standard deviation in 2009-2010 3/ | 15 | 12 | 30 | 27 | 25 | 29 | 25 | 13 | 12 | 10 | 9 | 10 | 8 | 7 | 11 | 8 | 5 | 3 | 4 | 3 | 3 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2009-2010 | 15 | 11 | 30 | 26 | 25 | 29 | 25 | 13 | 12 | 10 | 9 | 10 | 8 | 7 | 11 | 7 | 5 | 3 | 4 | 3 | 3 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2009-2010 4/ | 15 | 12 | 30 | 27 | 25 | 29 | 25 | 13 | 12 | 10 | 9 | 11 | 10 | 8 | 12 | 8 | 6 | 4 | 5 | 3 | 4 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 15 | 12 | 32 | 28 | 26 | 30 | 26 | 14 | 13 | 11 | 10 | 12 | 10 | 9 | 13 | 9 | 6 | 4 | 5 | 4 | 4 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2009 5/ | 15 | 18 | 44 | 39 | 36 | 42 | 36 | 19 | 17 | 15 | 13 | 15 | 11 | 10 | 16 | 10 | 7 | 4 | 6 | 4 | 5 |
| Memorandum item: | |||||||||||||||||||||
| Grant element assumed on residual financing (i.e., financing required above baseline) 6/ | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 | 49 |
Variables include real GDP growth, growth of GDP deflator (in U.S. dollar terms), non-interest current account in percent of GDP, and non-debt creating flows.
Assumes that the interest rate on new borrowing is by 2 percentage points higher than in the baseline, while grace and maturity periods are the same as in the baseline.
Exports values are assumed to remain permanently at the lower level, but the current account as a share of GDP is assumed to return to its baseline level after the shock (implicitly assuming an offsetting adjustment in import levels).
Includes official and private transfers and FDI.
Depreciation is defined as percentage decline in dollar/local currency rate, such that it never exceeds 100 percent.
Applies to all stress scenarios except for A2 (less favorable financing) in which the terms on all new financing are as specified in footnote 2.
9. The alternative scenario, including full delivery of HIPC and MDRI relief, would allow much faster up-front reduction of debt ratios. The scenario assumes that the C.A.R. reaches the HIPC completion point by 2010. If so, the NPV of debt-to-export ratio would be reduced to 125 percent in 2008 and plunge below the threshold (100 percent) by 2013.
10. The terms of new loans would have little impact on the projected debt indicators. The projected NPV of external PPG debt-to-exports ratio increases by only 3 percentage points in 2028 in the alternative scenario assuming less favorable terms for new borrowing.
This is mainly because the baseline scenario assumed new external borrowing equivalent only to 1 percent of GDP on average for the next 20 years. Given its current serious debt distress, there is little scope for the C.A.R. to borrow on nonconcessional terms without putting at risk the attainment of debt sustainability through debt relief.
11. Several bound tests indicate that the downward trend of debt ratios could be preserved despite plausible shocks. The most extreme case would be a hypothetical 30 percent depreciation of the exchange rate in 2009: this would push up the NPV of debt-to-GDP ratio beyond 50 percent. Other than this particular case, the increase in debt ratios under the various shocks would be modest.
IV. Public Debt Sustainability Analysis
A. Baseline
12. In the baseline scenario, total public debt is expected to decline steadily (Table 2a), as fiscal revenue improves steadily. On the financing side, it is assumed that in 2009 the government will begin to access regional government securities markets, which would allow it to eliminate expensive credits from commercial banks over the next several years and to clear most arrears (in particular on salaries and pensions) within the first 10 years of the simulation period. Given these assumptions, the NPV of public debt-to-GDP ratio would decline from 62 percent of GDP in 2008 to 14 percent in 2028 and the NPV of public debt-to-revenue ratio from 582 percent to 76 percent.
Central African Republic: Public Sector Debt Sustainability Framework, Baseline Scenario, 2005-28 (In percent of GDP, unless otherwise indicated)
Includes public and publicly-guaranteed external debt, domestic public debt, budgetary arrears of the central government, and domestic debt of state-owned enterprises.
Gross financing need is defined as the primary deficit plus debt service plus the stock of short-term debt at the end of the last period.
Revenues excluding grants.
Debt service is defined as the sum of interest and amortization of medium and long-term debt.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
Central African Republic: Public Sector Debt Sustainability Framework, Baseline Scenario, 2005-28 (In percent of GDP, unless otherwise indicated)
| Actual | Estimate | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2005 | 2006 | 2007 | Historical Average 5/ | Standard Deviation 5/ | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2008-13 Average | 2018 | 2028 | 2014-28 Average | ||||
| Public sector debt 1/ | 106.0 | 93.7 | 77.8 | 92.4 | 76.2 | 69.3 | 63.6 | 58.1 | 53.0 | 47.7 | 61.3 | 33.9 | 20.2 | 29.8 | ||||
| Of which: foreign-currency denominated debt | 81.6 | 69.9 | 54.2 | 82.8 | 54.9 | 50.5 | 44.2 | 39.5 | 35.2 | 30.5 | 42.5 | 19.0 | 15.2 | 17.0 | ||||
| Change in public sector debt | 3.1 | -12.3 | -15.9 | -1.8 | -1.6 | -6.9 | -5.8 | -5.5 | -5.1 | -5.2 | -5.0 | -1.8 | -1.0 | -1.8 | ||||
| Identified debt-creating flows | 6.5 | -23.5 | -13.2 | -10.1 | -0.9 | -5.5 | -4.8 | -3.4 | -3.1 | -3.0 | -3.5 | -1.2 | -0.6 | -1.1 | ||||
| Primary deficit | 3.6 | -9.9 | -2.7 | -0.9 | 3.6 | -0.9 | -0.7 | -1.2 | -0.2 | -0.3 | -0.5 | -0.6 | 0.2 | 0.4 | 0.0 | |||
| Revenue and grants | 12.4 | 22.8 | 14.3 | 14.7 | 13.8 | 16.6 | 15.7 | 15.9 | 16.2 | 16.6 | 15.8 | 18.1 | 22.5 | 19.4 | ||||
| Of which: grants | 4.1 | 13.3 | 4.1 | 5.6 | 3.3 | 5.3 | 4.2 | 4.2 | 4.1 | 4.1 | 4.2 | 4.0 | 4.0 | 4.0 | ||||
| Primary (noninterest) expenditure | 16.0 | 12.9 | 11.5 | 13.8 | 12.9 | 15.9 | 14.5 | 15.7 | 16.0 | 16.1 | 15.2 | 18.3 | 22.8 | 19.4 | ||||
| Automatic debt dynamics | 2.9 | -13.6 | -10.4 | -7.0 | 0.0 | -4.8 | -3.6 | -3.2 | -2.8 | -2.5 | -2.8 | -1.4 | -1.0 | -1.2 | ||||
| Contribution from interest rate/growth differential | -4.8 | -6.5 | -4.7 | -5.3 | -3.1 | -3.9 | -3.1 | -2.8 | -2.5 | -2.2 | -2.9 | -1.3 | -0.9 | -1.1 | ||||
| Of which: contribution from average real interest rate | -2.3 | -2.4 | -0.9 | -1.9 | -0.5 | -0.6 | 0.2 | 0.3 | 0.3 | 0.4 | 0.0 | 0.6 | 0.2 | 0.5 | ||||
| Of which: contribution from real GDP growth | -2.4 | -4.1 | -3.8 | -0.8 | -2.6 | -3.3 | -3.3 | -3.0 | -2.8 | -2.5 | -2.9 | -1.9 | -1.1 | -1.6 | ||||
| Contribution from real exchange rate depreciation | 7.7 | -7.1 | -5.7 | -2.7 | 3.1 | -1.0 | -0.4 | -0.4 | -0.3 | -0.3 | 0.1 | … | … | … | ||||
| Other identified debt-creating flows | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Privatization receipts (negative) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Recognition of implicit or contingent liabilities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Debt relief (HIPC and other) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Other (specify, e.g. bank recapitalization) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Residual, including asset changes | -3.4 | 11.2 | -2.7 | 1.7 | -0.7 | -1.3 | -1.0 | -2.1 | -2.0 | -2.3 | -1.6 | -0.6 | -0.4 | -0.7 | ||||
| other sustainability indicators | ||||||||||||||||||
| PV of public sector debt | 24.4 | 23.8 | 62.5 | 15.0 | 61.6 | 57.0 | 53.0 | 48.7 | 44.6 | 40.2 | 50.8 | 29.0 | 14.0 | 24.7 | ||||
| Of which: foreign-currency denominated debt | 0.0 | 0.0 | 38.9 | 4.3 | 40.3 | 38.2 | 33.6 | 30.1 | 26.8 | 23.0 | 32.0 | 14.1 | 9.0 | 11.9 | ||||
| Of which: external | … | … | 38.9 | 40.3 | 38.2 | 33.6 | 30.1 | 26.8 | 23.0 | 32.0 | 14.1 | 9.0 | 11.9 | |||||
| PV of contingent liabilities (not included in public sector debt) | … | … | … | … | … | … | … | … | … | … | … | … | … | |||||
| Gross financing need 2/ | 6.2 | -6.9 | 0.0 | 1.2 | 1.3 | 1.2 | 2.9 | 3.9 | 4.3 | 5.0 | 3.1 | 5.0 | 3.2 | 4.5 | ||||
| PV of public sector debt-to-revenue and grants ratio (in percent) | 197.0 | 104.3 | 438.5 | 94.6 | 445.2 | 343.2 | 337.1 | 305.4 | 274.4 | 242.7 | 324.7 | 160.5 | 62.2 | 131.3 | ||||
| PV of public sector debt-to-revenue ratio (in percent) | 296.0 | 250.6 | 613.8 | 145.0 | 582.4 | 506.3 | 460.1 | 413.6 | 368.3 | 322.8 | 442.3 | 205.6 | 75.6 | 167.1 | ||||
| Of which: external 3/ | … | … | 381.6 | 381.1 | 339.2 | 291.9 | 255.9 | 221.4 | 184.7 | 279.0 | 99.6 | 48.5 | 80.8 | |||||
| Debt service-to-revenue and grants ratio (in percent) 4/ | 21.0 | 13.1 | 18.8 | 20.5 | 16.0 | 11.3 | 26.1 | 25.8 | 28.3 | 33.3 | 23.5 | 26.7 | 12.7 | 23.4 | ||||
| Debt service-to-revenue ratio (in percent) 4/ | 31.5 | 31.5 | 26.3 | 22.5 | 20.9 | 16.7 | 35.6 | 35.0 | 38.0 | 44.3 | 31.8 | 34.2 | 15.4 | 29.7 | ||||
| Primary deficit that stabilizes the debt-to-GDP ratio | 0.5 | 2.4 | 13.2 | 5.4 | 0.7 | 6.2 | 4.6 | 5.2 | 4.8 | 4.7 | 4.4 | 1.9 | 1.3 | 1.9 | ||||
| Key macroeconomic and fiscal assumptions | ||||||||||||||||||
| Real GDP growth (in percent) | 2.4 | 4.0 | 4.2 | 0.9 | 3.7 | 3.5 | 4.5 | 5.0 | 5.0 | 5.0 | 5.0 | 4.7 | 5.5 | 5.5 | 5.4 | |||
| Average nominal interest rate on forex debt (in percent) | 0.6 | 0.8 | 0.7 | 1.1 | 0.4 | 1.5 | 1.0 | 1.8 | 1.7 | 1.5 | 1.5 | 1.5 | 1.1 | 1.2 | 1.3 | |||
| Average real interest rate on domestic debt (in percent) | -1.7 | -2.6 | 1.2 | -1.1 | 2.0 | -1.8 | -0.6 | 1.2 | 1.9 | 2.4 | 2.9 | 1.0 | 5.2 | 4.2 | 4.8 | |||
| Real exchange rate depreciation (in percent, + indicates depreciation) | 10.2 | -9.3 | -8.7 | -4.5 | 8.9 | 5.9 | … | … | … | … | … | … | … | … | … | |||
| Inflation rate (GDP deflator, in percent) | 3.7 | 4.3 | 2.0 | 2.9 | 2.7 | 4.5 | 3.3 | 2.4 | 2.4 | 2.4 | 2.4 | 2.9 | 2.4 | 2.4 | 2.4 | |||
| Growth of real primary spending (deflated by GDP deflator, in percent) | 0.3 | -0.2 | -0.1 | 0.0 | 0.2 | 0.2 | 0.3 | 0.0 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | |||
| Grant element of new external borrowing (in percent) | … | … | … | … | … | 30.1 | 28.9 | 51.5 | 51.5 | 51.5 | 51.5 | 44.2 | 51.5 | 51.5 | … | |||
Includes public and publicly-guaranteed external debt, domestic public debt, budgetary arrears of the central government, and domestic debt of state-owned enterprises.
Gross financing need is defined as the primary deficit plus debt service plus the stock of short-term debt at the end of the last period.
Revenues excluding grants.
Debt service is defined as the sum of interest and amortization of medium and long-term debt.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
Central African Republic: Public Sector Debt Sustainability Framework, Baseline Scenario, 2005-28 (In percent of GDP, unless otherwise indicated)
| Actual | Estimate | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2005 | 2006 | 2007 | Historical Average 5/ | Standard Deviation 5/ | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2008-13 Average | 2018 | 2028 | 2014-28 Average | ||||
| Public sector debt 1/ | 106.0 | 93.7 | 77.8 | 92.4 | 76.2 | 69.3 | 63.6 | 58.1 | 53.0 | 47.7 | 61.3 | 33.9 | 20.2 | 29.8 | ||||
| Of which: foreign-currency denominated debt | 81.6 | 69.9 | 54.2 | 82.8 | 54.9 | 50.5 | 44.2 | 39.5 | 35.2 | 30.5 | 42.5 | 19.0 | 15.2 | 17.0 | ||||
| Change in public sector debt | 3.1 | -12.3 | -15.9 | -1.8 | -1.6 | -6.9 | -5.8 | -5.5 | -5.1 | -5.2 | -5.0 | -1.8 | -1.0 | -1.8 | ||||
| Identified debt-creating flows | 6.5 | -23.5 | -13.2 | -10.1 | -0.9 | -5.5 | -4.8 | -3.4 | -3.1 | -3.0 | -3.5 | -1.2 | -0.6 | -1.1 | ||||
| Primary deficit | 3.6 | -9.9 | -2.7 | -0.9 | 3.6 | -0.9 | -0.7 | -1.2 | -0.2 | -0.3 | -0.5 | -0.6 | 0.2 | 0.4 | 0.0 | |||
| Revenue and grants | 12.4 | 22.8 | 14.3 | 14.7 | 13.8 | 16.6 | 15.7 | 15.9 | 16.2 | 16.6 | 15.8 | 18.1 | 22.5 | 19.4 | ||||
| Of which: grants | 4.1 | 13.3 | 4.1 | 5.6 | 3.3 | 5.3 | 4.2 | 4.2 | 4.1 | 4.1 | 4.2 | 4.0 | 4.0 | 4.0 | ||||
| Primary (noninterest) expenditure | 16.0 | 12.9 | 11.5 | 13.8 | 12.9 | 15.9 | 14.5 | 15.7 | 16.0 | 16.1 | 15.2 | 18.3 | 22.8 | 19.4 | ||||
| Automatic debt dynamics | 2.9 | -13.6 | -10.4 | -7.0 | 0.0 | -4.8 | -3.6 | -3.2 | -2.8 | -2.5 | -2.8 | -1.4 | -1.0 | -1.2 | ||||
| Contribution from interest rate/growth differential | -4.8 | -6.5 | -4.7 | -5.3 | -3.1 | -3.9 | -3.1 | -2.8 | -2.5 | -2.2 | -2.9 | -1.3 | -0.9 | -1.1 | ||||
| Of which: contribution from average real interest rate | -2.3 | -2.4 | -0.9 | -1.9 | -0.5 | -0.6 | 0.2 | 0.3 | 0.3 | 0.4 | 0.0 | 0.6 | 0.2 | 0.5 | ||||
| Of which: contribution from real GDP growth | -2.4 | -4.1 | -3.8 | -0.8 | -2.6 | -3.3 | -3.3 | -3.0 | -2.8 | -2.5 | -2.9 | -1.9 | -1.1 | -1.6 | ||||
| Contribution from real exchange rate depreciation | 7.7 | -7.1 | -5.7 | -2.7 | 3.1 | -1.0 | -0.4 | -0.4 | -0.3 | -0.3 | 0.1 | … | … | … | ||||
| Other identified debt-creating flows | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Privatization receipts (negative) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Recognition of implicit or contingent liabilities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Debt relief (HIPC and other) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Other (specify, e.g. bank recapitalization) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||
| Residual, including asset changes | -3.4 | 11.2 | -2.7 | 1.7 | -0.7 | -1.3 | -1.0 | -2.1 | -2.0 | -2.3 | -1.6 | -0.6 | -0.4 | -0.7 | ||||
| other sustainability indicators | ||||||||||||||||||
| PV of public sector debt | 24.4 | 23.8 | 62.5 | 15.0 | 61.6 | 57.0 | 53.0 | 48.7 | 44.6 | 40.2 | 50.8 | 29.0 | 14.0 | 24.7 | ||||
| Of which: foreign-currency denominated debt | 0.0 | 0.0 | 38.9 | 4.3 | 40.3 | 38.2 | 33.6 | 30.1 | 26.8 | 23.0 | 32.0 | 14.1 | 9.0 | 11.9 | ||||
| Of which: external | … | … | 38.9 | 40.3 | 38.2 | 33.6 | 30.1 | 26.8 | 23.0 | 32.0 | 14.1 | 9.0 | 11.9 | |||||
| PV of contingent liabilities (not included in public sector debt) | … | … | … | … | … | … | … | … | … | … | … | … | … | |||||
| Gross financing need 2/ | 6.2 | -6.9 | 0.0 | 1.2 | 1.3 | 1.2 | 2.9 | 3.9 | 4.3 | 5.0 | 3.1 | 5.0 | 3.2 | 4.5 | ||||
| PV of public sector debt-to-revenue and grants ratio (in percent) | 197.0 | 104.3 | 438.5 | 94.6 | 445.2 | 343.2 | 337.1 | 305.4 | 274.4 | 242.7 | 324.7 | 160.5 | 62.2 | 131.3 | ||||
| PV of public sector debt-to-revenue ratio (in percent) | 296.0 | 250.6 | 613.8 | 145.0 | 582.4 | 506.3 | 460.1 | 413.6 | 368.3 | 322.8 | 442.3 | 205.6 | 75.6 | 167.1 | ||||
| Of which: external 3/ | … | … | 381.6 | 381.1 | 339.2 | 291.9 | 255.9 | 221.4 | 184.7 | 279.0 | 99.6 | 48.5 | 80.8 | |||||
| Debt service-to-revenue and grants ratio (in percent) 4/ | 21.0 | 13.1 | 18.8 | 20.5 | 16.0 | 11.3 | 26.1 | 25.8 | 28.3 | 33.3 | 23.5 | 26.7 | 12.7 | 23.4 | ||||
| Debt service-to-revenue ratio (in percent) 4/ | 31.5 | 31.5 | 26.3 | 22.5 | 20.9 | 16.7 | 35.6 | 35.0 | 38.0 | 44.3 | 31.8 | 34.2 | 15.4 | 29.7 | ||||
| Primary deficit that stabilizes the debt-to-GDP ratio | 0.5 | 2.4 | 13.2 | 5.4 | ||||||||||||||