Abstract
This paper discusses Moldova’s request for a Three-Year Arrangement under the Extended Credit Facility and request for an Extended Arrangement. The economy remained overregulated and hampered by relative price distortions. High barriers to entry and low competition in telecommunications, trade, and food processing have kept domestic prices significantly above international prices of many consumer products. In contrast, utility tariffs generally remained well below cost-recovery levels, leading to substantial arrears and underinvestment. The crisis and pre-election spending hikes resulted in a large increase in the fiscal deficit.
Debt Sustainability Analysis
The joint IMF-World Bank low-income country debt sustainability analysis (LIC DSA) indicates that Moldova’s risk of debt distress is low at present, but additional factors increase vulnerability compared to the previous DSA. Under the baseline scenario, the debt burden will temporarily increase in the medium term as a result of significant financing contracted by the government to counteract the effects of the economic crisis. The indicator of net present value (NPV) of the debt-to-GDP ratio could temporarily breach its indicative threshold under two of the conventional stress tests, but other indicators remain below their respective thresholds. However, large private sector debt and potential large borrowing on non-concessional terms signal elevated risks and warrant a continuing careful approach to external financing.
1. The DSA presented here reflects the macroeconomic framework underlying staff projections under the program supported by a blend of Extended Credit Facility -Extended Fund Facility Arrangements (ECF/EFF) and extended until 2029. It assumes that the implementation of prudent macroeconomic and structural policies, including a fiscal framework that aims to reverse recent structural fiscal deterioration, and adoption of the flexible exchange rate policy, will help Moldova recover from the economic crisis and resume sustainable growth.10
IV. Background
2. Reflecting strong growth, Moldova’s total external debt burden has declined in recent years, helped by the shrinking public debt.11 At end-2008 public debt was low and was mostly owed to multilaterals and Paris Club creditors on concessional terms, without significant rollover risks. The ratios of debt service to exports and to fiscal revenues more than halved since 2006 and remain reasonably low. In the recent review of debt limits in Fund-supported programs, Moldova has been classified as a higher-capacity country, reflecting progress made in upgrading capacities for managing domestic and external public debt, reforming public administration, and improving transparency and accountability in the public sector. This progress is important, taking into account the significant borrowing that Moldova intends to contract from its international partners in the next few years.
Composition of external debt, 2000-2008
Citation: IMF Staff Country Reports 2010, 032; 10.5089/9781451825190.002.A002
Moldova: Composition of External PPG Debt, 2008
Moldova: Composition of External PPG Debt, 2008
| USD milion | Percent of GDP | Net Persent Value in USD million |
|||||
|---|---|---|---|---|---|---|---|
| Total external debt | 3386 | 56 | … | ||||
| External private debt | 2433 | 40 | … | ||||
| External public debt | 953 | 16 | 742 | ||||
| Multilaterals | 644 | 11 | 479 | ||||
| IMF | 164 | 3 | 136 | ||||
| World Bank | 436 | 7 | 307 | ||||
| IDA | 311 | 5 | 184 | ||||
| IBRD | 125 | 2 | 123 | ||||
| Others | 44 | 1 | 36 | ||||
| Official bilateral | 276 | 5 | 240 | ||||
| Paris Club | 257 | 4 | 225 | ||||
| Non-Paris Club | 19 | 0 | 16 | ||||
| Commercial | 33 | 1 | 23 | ||||
Moldova: Composition of External PPG Debt, 2008
| USD milion | Percent of GDP | Net Persent Value in USD million |
|||||
|---|---|---|---|---|---|---|---|
| Total external debt | 3386 | 56 | … | ||||
| External private debt | 2433 | 40 | … | ||||
| External public debt | 953 | 16 | 742 | ||||
| Multilaterals | 644 | 11 | 479 | ||||
| IMF | 164 | 3 | 136 | ||||
| World Bank | 436 | 7 | 307 | ||||
| IDA | 311 | 5 | 184 | ||||
| IBRD | 125 | 2 | 123 | ||||
| Others | 44 | 1 | 36 | ||||
| Official bilateral | 276 | 5 | 240 | ||||
| Paris Club | 257 | 4 | 225 | ||||
| Non-Paris Club | 19 | 0 | 16 | ||||
| Commercial | 33 | 1 | 23 | ||||
3. At the same time, private sector borrowing remains high. Between 2004 and 2008, the external private debt increased from 33 to 40 percent of GDP, two-and-a-half times the size of the public and publicly guaranteed (PPG) external debt. This increase was mainly caused by rising external exposure of the banking sector, both on a short-term (currency and deposits) and on a long-term (credits) basis. The majority of non-bank debt is short-term, and consists of trade credits, arrears and other payment liabilities, mostly for the imports of natural resources. The latter emerged in part as a result of heating tariffs set below cost recovery levels, which created a sequence of domestic and (later on) external payment arrears. This debt could potentially become a fiscal liability of up to 3 percent of GDP, since the heat production and distribution companies that are not paying for energy resources are publicly-owned companies.
Evolution of external of private sector debt
(percent of GDP, unless indicated otherwise)
Citation: IMF Staff Country Reports 2010, 032; 10.5089/9781451825190.002.A002
4. The long-term debts of the non-banking sector are loans. Their share in total non-bank debt has been rising since 2005, reflecting mainly the increasing share of foreign owned companies operating in Moldova. The share of private debt is very high by international standards, significantly exceeding the levels observed in other LICs and developing economies.
Private external debt, cross country comparison, 2000-2009
(percent of GDP)
Citation: IMF Staff Country Reports 2010, 032; 10.5089/9781451825190.002.A002
V. Macroeconomic Framework
5. The international financial crisis has worsened Moldova’s macroeconomic outlook significantly since the 2008 DSA exercise. In 2009, FDI came to a halt, domestic investment contracted sharply, and recession in the trading partners caused a severe decline in exports and remittances, contributing to a collapse in domestic demand. As a result, the economy went into a recession and external and fiscal financing gaps emerged. The baseline macroeconomic projections in this DSA take into account the expected sizeable fiscal and external adjustment, supported by significant borrowing in the near future in the context of the IMF arrangement (Box 1).12 Higher borrowing needed to fill the gaps will temporarily increase debt ratios, reversing recent gains in lowering the debt burden.
Macroeconomic Assumptions behind the DSA
During the projection period (2009–2029), real GDP is projected to grow by 3.4 percent on average. After the initial decline of 9 percent in 2009, growth will gradually rise to an average of 2.3 percent in 2010–2011 and to 5 percent in 2012–2014, led by a rebound in exports, investment and remittances. In the long-run, the negative output gap will close and growth will decline to 4 percent.
Inflation is projected to remain in single digits, increasing somewhat in 2010 as the economy recovers, but subsiding to 4 percent in the long-run (as measured by the GDP deflator). This projection assumes sound public sector policies and strong commitment of the National Bank to preserving price stability.
Exports are expected to be an important driver of growth. They are projected to accelerate in the medium term, as the trading partners recover from the recent crisis, internal restrictions on exports of wine and other agricultural products are removed, and Moldova makes full use of the autonomous trade preferences agreement with the EU. In addition, structural reforms aimed at improving the business environment, demonopolizing telecommunication services and expanding access to broadband internet should result in strong growth of services, in particular software development. As a result, exports of goods and services are projected to reach 59 percent of GDP in 2029.
Imports are projected to expand as well, fuelled by intermediate imports needed for the exports sector, as well as driven by the rebound in investment and private consumption. In the long-term, however, growth of imports will subside somewhat as domestic production of tradables expands.
Remittances are projected to gradually recover from the depressed 2009 level in the medium-term. In the long-term, however, as the economy develops, more employment options are available domestically, and migrants abroad lose ties with the home country, remittances are projected to decline relative to GDP from 32 percent to 29 percent of GDP.
The current account deficit is projected to widen in the short run, and to stabilize around 8-9 percent of GDP in the medium and long term. It will be financed by FDI that is expected to recover to the pre-boom levels of 7.2 percent of GDP in the long run, supported by structural reforms aimed at improving the business climate.
The primary fiscal deficit is projected to decline in the medium term as a result of fiscal consolidation undertaken by the authorities. In the long run, revenues are projected to increase by 3.2 percent of GDP, while rationalization of primary noninterest expenditures will cause their decline by 4.4 percent of GDP, resulting in a primary surplus of 0.1 percent of GDP.
Borrowing assumptions reflect the gradual shift of Moldova away from concessional financing. Concessional loans are projected to decline from 88 percent of total borrowing in 2015 to 23 percent in 2029. At the same time, borrowing from commercial sources is projected to increase, reaching 55 percent of the total in 2029.
6. The macroeconomic assumptions differ with respect to the previous DSA due to the impact of recent global crisis. Key changes include a significantly lower GDP growth in the medium and long term on account of effects of the 2009 crisis, as well as a lower inflation rate. Recent reforms introduced by the government are projected to facilitate exports of agricultural products and exports of services, resulting in higher share of exports to GDP in the long-run than envisaged in the previous DSA, and a smaller current account deficit.
VI. External Debt Sustainability under the Baseline and Alternative Scenarios
7. All external debt ratios remain well below the thresholds under the baseline scenario, but the PV of the debt-to-GDP ratio temporarily breaches the threshold under two stress scenarios (Figures 1A–2A, Tables 1A–4A).13 Large borrowing in the next three years needed to fill the external and fiscal financing gaps will result in a temporary but significant increase in the level of external PPG debt to 35 percent of GDP in 2012. Due to the initial low levels of debt, the PV of the debt will not breach the threshold under the baseline scenario but could exceed it under two stress scenarios (lower non-debt creating flows and a decline in the growth of exports).14 These extreme scenarios, however, assume that exports do not pick up before 2012 after the 2009 collapse and remittances decline further from the very depressed 2009 levels. Taking into account the ongoing recovery in Moldova’s trading partners, as well as the dismantling of trade restrictions by the new government, exports are not likely to remain stagnant. Remittances, which before the 2009 crisis were one of the highest in the world as percentage of GDP, are also unlikely to decrease any further, mitigating the risks.
Moldova: Indicators of Public and Publicly Guaranteed External Debt under Alternative Scenarios, 2009-2029 1/
Citation: IMF Staff Country Reports 2010, 032; 10.5089/9781451825190.002.A002
Sources: Country authorities; and staff estimates and projections.1/ The most extreme stress test is the test that yields the highest ratio in 2019. In figure b. it corresponds to a Terms shock; in c. to a Exports shock; in d. to a Terms shock; in e. to a Exports shock and in figure f. to a Non-debt flows shockMoldova: Indicators of Public Debt Under Alternative Scenarios, 2009-2029 1/
Citation: IMF Staff Country Reports 2010, 032; 10.5089/9781451825190.002.A002
Sources: Country authorities; and staff estimates and projections.1/ The most extreme stress test is the test that yields the highest ratio in 2019.2/ Revenues are defined inclusive of grants.Moldova: External Debt Sustainability Framework, Baseline Scenario, 2006-2029 1/
(In percent of GDP, unless otherwise indicated)
Includes both public and private sector external debt.
Derived as [r - g - ρ(1+g)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = 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.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
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).
Moldova: External Debt Sustainability Framework, Baseline Scenario, 2006-2029 1/
(In percent of GDP, unless otherwise indicated)
| Actual | Historical Average | Standard Deviation | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2009-2014 Average | 2019 | 2029 | 2015-2029 Average | |||||||
| External debt (nominal) 1/ | 64.7 | 62.7 | 55.9 | 68.1 | 79.3 | 84.2 | 86.4 | 84.8 | 82.7 | 76.7 | 67.6 | ||||||||
| o/w public and publicly guaranteed (PPG) | 25.6 | 19.8 | 15.7 | 22.4 | 28.7 | 32.3 | 34.6 | 33.1 | 31.3 | 25.7 | 23.1 | ||||||||
| Change in external debt | 2.5 | -2.0 | -6.8 | 12.2 | 11.2 | 4.9 | 2.2 | -1.6 | -2.1 | -1.2 | -1.0 | ||||||||
| Identified net debt-creating flows | -2.1 | -9.3 | -10.7 | 13.9 | 6.8 | 5.4 | 2.3 | 0.1 | -0.9 | -0.2 | -0.4 | ||||||||
| Non-interest current account deficit | 10.3 | 15.5 | 16.6 | 6.0 | 6.6 | 7.5 | 7.9 | 8.7 | 7.3 | 6.2 | 5.3 | 5.5 | 5.4 | 5.5 | |||||
| Deficit in balance of goods and services | 47.1 | 52.5 | 53.0 | 33.0 | 37.3 | 38.2 | 37.6 | 37.3 | 37.0 | 36.0 | 34.0 | ||||||||
| Exports | 44.8 | 45.4 | 41.0 | 35.6 | 40.8 | 47.0 | 49.6 | 51.5 | 52.8 | 55.4 | 58.2 | ||||||||
| Imports | 91.9 | 97.9 | 94.0 | 68.5 | 78.1 | 85.3 | 87.2 | 88.7 | 89.8 | 91.4 | 92.3 | ||||||||
| Net current transfers (negative = inflow) | -39.1 | -40.0 | -38.4 | -29.9 | 8.5 | -27.2 | -32.4 | -32.5 | -33.1 | -33.9 | -34.5 | -32.6 | -29.2 | -31.6 | |||||
| o/w official | -1.9 | -1.7 | -2.0 | -1.5 | -3.2 | -2.5 | -1.8 | -1.7 | -1.6 | -1.6 | -1.6 | ||||||||
| Other current account flows (negative = net inflow) | 2.3 | 3.0 | 1.9 | 1.7 | 3.1 | 2.9 | 2.9 | 2.9 | 2.8 | 2.1 | 0.6 | ||||||||
| Net FDI (negative = inflow) | -6.9 | -11.9 | -11.4 | -6.5 | 3.4 | -1.7 | -3.8 | -4.8 | -5.2 | -5.9 | -6.5 | -6.8 | -7.2 | -6.9 | |||||
| Endogenous debt dynamics 2/ | -5.5 | -13.0 | -15.9 | 8.1 | 2.7 | 1.6 | 0.1 | -0.3 | 0.3 | 1.1 | 1.4 | ||||||||
| Contribution from nominal interest rate | 2.1 | 1.6 | 1.3 | 2.5 | 3.8 | 3.9 | 4.1 | 3.8 | 4.2 | 4.0 | 3.9 | ||||||||
| Contribution from real GDP growth | -2.6 | -1.5 | -3.6 | 5.7 | -1.1 | -2.3 | -3.9 | -4.0 | -3.9 | -2.9 | -2.6 | ||||||||
| Contribution from price and exchange rate changes | -5.1 | -13.1 | -13.6 | … | … | … | … | … | … | … | … | … | |||||||
| Residual (3-4) 3/ | 4.7 | 7.3 | 3.9 | -1.7 | 4.4 | -0.5 | -0.1 | -1.7 | -1.2 | -1.0 | -0.6 | ||||||||
| o/w exceptional financing | -2.5 | -3.1 | -2.6 | -1.3 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
| PV of external debt 4/ | … | … | 55.1 | 67.4 | 76.6 | 80.7 | 82.3 | 80.9 | 79.1 | 73.5 | 66.9 | ||||||||
| In percent of exports | … | … | 134.3 | 189.3 | 187.7 | 171.7 | 165.9 | 157.2 | 149.6 | 132.8 | 114.9 | ||||||||
| PV of PPG external debt | … | … | 14.9 | 21.6 | 26.0 | 28.8 | 30.6 | 29.2 | 27.6 | 22.6 | 22.4 | ||||||||
| In percent of exports | … | … | 36.3 | 60.7 | 63.7 | 61.3 | 61.6 | 56.8 | 52.3 | 40.8 | 38.5 | ||||||||
| In percent of government revenues | … | … | 38.3 | 60.2 | 73.0 | 78.5 | 81.6 | 74.7 | 70.1 | 57.3 | 56.8 | ||||||||
| Debt service-to-exports ratio (in percent) | 15.1 | 13.7 | 16.6 | 19 | 21 | 17 | 18 | 17 | 19 | 24.5 | 24.6 | ||||||||
| PPG debt service-to-exports ratio (in percent) | 7.0 | 3.9 | 3.3 | 4.7 | 4.1 | 3.4 | 3.6 | 3.6 | 3.3 | 4.8 | 4.6 | ||||||||
| PPG debt service-to-revenue ratio (in percent) | 8.0 | 4.4 | 3.5 | 4.6 | 4.7 | 4.3 | 4.7 | 4.8 | 4.4 | 6.8 | 6.8 | ||||||||
| Total gross financing need (Millions of U.S. dollars) | 1118.9 | 1332.9 | 1865.3 | 2057.4 | 2003.2 | 1988.1 | 2007.1 | 1918.0 | 1957.8 | 2446.1 | 3368.6 | ||||||||
| Non-interest current account deficit that stabilizes debt ratio | 7.7 | 17.5 | 23.3 | -4.7 | -3.3 | 3.8 | 5.1 | 7.9 | 7.4 | 6.7 | 6.4 | ||||||||
| Key macroeconomic assumptions | |||||||||||||||||||
| Real GDP growth (in percent) | 4.8 | 3.0 | 7.8 | 5.0 | 3.6 | -9.0 | 1.5 | 3.0 | 5.0 | 5.0 | 5.0 | 1.8 | 4.0 | 4.0 | 4.0 | ||||
| GDP deflator in US dollar terms (change in percent) | 8.9 | 25.4 | 27.6 | 9.4 | 15.7 | -2.8 | -6.3 | 1.6 | 1.9 | 2.1 | 2.4 | -0.2 | 2.0 | 2.0 | 2.0 | ||||
| Effective interest rate (percent) 5/ | 3.9 | 3.2 | 2.8 | 4.1 | 0.8 | 3.9 | 5.3 | 5.1 | 5.2 | 4.7 | 5.3 | 4.9 | 5.5 | 6.1 | 5.8 | ||||
| Growth of exports of G&S (US dollar terms, in percent) | 1.5 | 30.9 | 24.3 | 13.2 | 15.7 | -23.2 | 9.1 | 20.5 | 13.0 | 11.2 | 10.4 | 6.8 | 6.6 | 6.6 | 6.8 | ||||
| Growth of imports of G&S (US dollar terms, in percent) | 15.3 | 37.5 | 32.1 | 18.7 | 20.9 | -35.5 | 8.4 | 14.2 | 9.5 | 9.2 | 8.9 | 2.4 | 6.3 | 6.2 | 6.3 | ||||
| Grant element of new public sector borrowing (in percent) | … | … | … | … | … | -1.1 | 27.3 | 22.2 | 22.4 | 27.3 | 32.5 | 21.8 | 12.4 | -3.3 | 8.3 | ||||
| Government revenues (excluding grants, in percent of GDP) | 39.2 | 39.9 | 38.9 | 35.9 | 35.6 | 36.7 | 37.5 | 39.1 | 39.4 | 39.4 | 39.4 | 39.4 | |||||||
| Aid flows (in Millions of US dollars) 7/ | 46.6 | 126.1 | 127.0 | 123.4 | 249.4 | 190.9 | 162.8 | 162.8 | 162.8 | 188.0 | 254.0 | ||||||||
| o/w Grants | 24.0 | 79.9 | 102.8 | 99.7 | 161.4 | 130.9 | 102.8 | 102.8 | 102.8 | 138.0 | 249.0 | ||||||||
| o/w Concessional loans | 22.6 | 46.2 | 24.2 | 23.7 | 88.0 | 60.0 | 60.0 | 60.0 | 60.0 | 50.0 | 5.0 | ||||||||
| Grant-equivalent financing (in percent of GDP) 8/ | … | … | … | 1.8 | 5.4 | 3.8 | 3.0 | 2.3 | 2.1 | 1.9 | 1.5 | 1.8 | |||||||
| Grant-equivalent financing (in percent of external financing) 8/ | … | … | … | 33.1 | 47.9 | 44.8 | 41.8 | 58.2 | 65.3 | 43.3 | 33.6 | 42.0 | |||||||
| Memorandum items: | |||||||||||||||||||
| Nominal GDP (Millions of US dollars) | 3408.4 | 4401.1 | 6054.8 | 5359.0 | 5094.8 | 5330.4 | 5705.7 | 6119.2 | 6581.8 | 8841.5 | 15953.7 | ||||||||
| Nominal dollar GDP growth | 14.1 | 29.1 | 37.6 | -11.5 | -4.9 | 4.6 | 7.0 | 7.2 | 7.6 | 1.7 | 6.1 | 6.1 | 6.1 | ||||||
| PV of PPG external debt (in Millions of US dollars) | 900.8 | 1044.9 | 1298.0 | 1514.4 | 1713.4 | 1768.2 | 1799.2 | 1976.8 | 3533.7 | ||||||||||
| (PVt-PVt-1)/GDPt-1 (in percent) | 2.4 | 4.7 | 4.2 | 3.7 | 1.0 | 0.5 | 2.8 | 0.7 | 1.1 | 1.0 | |||||||||
Includes both public and private sector external debt.
Derived as [r - g - ρ(1+g)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = 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.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
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).
Moldova: External Debt Sustainability Framework, Baseline Scenario, 2006-2029 1/
(In percent of GDP, unless otherwise indicated)
| Actual | Historical Average | Standard Deviation | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2009-2014 Average | 2019 | 2029 | 2015-2029 Average | |||||||
| External debt (nominal) 1/ | 64.7 | 62.7 | 55.9 | 68.1 | 79.3 | 84.2 | 86.4 | 84.8 | 82.7 | 76.7 | 67.6 | ||||||||
| o/w public and publicly guaranteed (PPG) | 25.6 | 19.8 | 15.7 | 22.4 | 28.7 | 32.3 | 34.6 | 33.1 | 31.3 | 25.7 | 23.1 | ||||||||
| Change in external debt | 2.5 | -2.0 | -6.8 | 12.2 | 11.2 | 4.9 | 2.2 | -1.6 | -2.1 | -1.2 | -1.0 | ||||||||
| Identified net debt-creating flows | -2.1 | -9.3 | -10.7 | 13.9 | 6.8 | 5.4 | 2.3 | 0.1 | -0.9 | -0.2 | -0.4 | ||||||||
| Non-interest current account deficit | 10.3 | 15.5 | 16.6 | 6.0 | 6.6 | 7.5 | 7.9 | 8.7 | 7.3 | 6.2 | 5.3 | 5.5 | 5.4 | 5.5 | |||||
| Deficit in balance of goods and services | 47.1 | 52.5 | 53.0 | 33.0 | 37.3 | 38.2 | 37.6 | 37.3 | 37.0 | 36.0 | 34.0 | ||||||||
| Exports | 44.8 | 45.4 | 41.0 | 35.6 | 40.8 | 47.0 | 49.6 | 51.5 | 52.8 | 55.4 | 58.2 | ||||||||
| Imports | 91.9 | 97.9 | 94.0 | 68.5 | 78.1 | 85.3 | 87.2 | 88.7 | 89.8 | 91.4 | 92.3 | ||||||||
| Net current transfers (negative = inflow) | -39.1 | -40.0 | -38.4 | -29.9 | 8.5 | -27.2 | -32.4 | -32.5 | -33.1 | -33.9 | -34.5 | -32.6 | -29.2 | -31.6 | |||||
| o/w official | -1.9 | -1.7 | -2.0 | -1.5 | -3.2 | -2.5 | -1.8 | -1.7 | -1.6 | -1.6 | -1.6 | ||||||||
| Other current account flows (negative = net inflow) | 2.3 | 3.0 | 1.9 | 1.7 | 3.1 | 2.9 | 2.9 | 2.9 | 2.8 | 2.1 | 0.6 | ||||||||
| Net FDI (negative = inflow) | -6.9 | -11.9 | -11.4 | -6.5 | 3.4 | -1.7 | -3.8 | -4.8 | -5.2 | -5.9 | -6.5 | -6.8 | -7.2 | -6.9 | |||||
| Endogenous debt dynamics 2/ | -5.5 | -13.0 | -15.9 | 8.1 | 2.7 | 1.6 | 0.1 | -0.3 | 0.3 | 1.1 | 1.4 | ||||||||
| Contribution from nominal interest rate | 2.1 | 1.6 | 1.3 | 2.5 | 3.8 | 3.9 | 4.1 | 3.8 | 4.2 | 4.0 | 3.9 | ||||||||
| Contribution from real GDP growth | -2.6 | -1.5 | -3.6 | 5.7 | -1.1 | -2.3 | -3.9 | -4.0 | -3.9 | -2.9 | -2.6 | ||||||||
| Contribution from price and exchange rate changes | -5.1 | -13.1 | -13.6 | … | … | … | … | … | … | … | … | … | |||||||
| Residual (3-4) 3/ | 4.7 | 7.3 | 3.9 | -1.7 | 4.4 | -0.5 | -0.1 | -1.7 | -1.2 | -1.0 | -0.6 | ||||||||
| o/w exceptional financing | -2.5 | -3.1 | -2.6 | -1.3 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
| PV of external debt 4/ | … | … | 55.1 | 67.4 | 76.6 | 80.7 | 82.3 | 80.9 | 79.1 | 73.5 | 66.9 | ||||||||
| In percent of exports | … | … | 134.3 | 189.3 | 187.7 | 171.7 | 165.9 | 157.2 | 149.6 | 132.8 | 114.9 | ||||||||
| PV of PPG external debt | … | … | 14.9 | 21.6 | 26.0 | 28.8 | 30.6 | 29.2 | 27.6 | 22.6 | 22.4 | ||||||||
| In percent of exports | … | … | 36.3 | 60.7 | 63.7 | 61.3 | 61.6 | 56.8 | 52.3 | 40.8 | 38.5 | ||||||||
| In percent of government revenues | … | … | 38.3 | 60.2 | 73.0 | 78.5 | 81.6 | 74.7 | 70.1 | 57.3 | 56.8 | ||||||||
| Debt service-to-exports ratio (in percent) | 15.1 | 13.7 | 16.6 | 19 | 21 | 17 | 18 | 17 | 19 | 24.5 | 24.6 | ||||||||
| PPG debt service-to-exports ratio (in percent) | 7.0 | 3.9 | 3.3 | 4.7 | 4.1 | 3.4 | 3.6 | 3.6 | 3.3 | 4.8 | 4.6 | ||||||||
| PPG debt service-to-revenue ratio (in percent) | 8.0 | 4.4 | 3.5 | 4.6 | 4.7 | 4.3 | 4.7 | 4.8 | 4.4 | 6.8 | 6.8 | ||||||||
| Total gross financing need (Millions of U.S. dollars) | 1118.9 | 1332.9 | 1865.3 | 2057.4 | 2003.2 | 1988.1 | 2007.1 | 1918.0 | 1957.8 | 2446.1 | 3368.6 | ||||||||
| Non-interest current account deficit that stabilizes debt ratio | 7.7 | 17.5 | 23.3 | -4.7 | -3.3 | 3.8 | 5.1 | 7.9 | 7.4 | 6.7 | 6.4 | ||||||||
| Key macroeconomic assumptions | |||||||||||||||||||
| Real GDP growth (in percent) | 4.8 | 3.0 | 7.8 | 5.0 | 3.6 | -9.0 | 1.5 | 3.0 | 5.0 | 5.0 | 5.0 | 1.8 | 4.0 | 4.0 | 4.0 | ||||
| GDP deflator in US dollar terms (change in percent) | 8.9 | 25.4 | 27.6 | 9.4 | 15.7 | -2.8 | -6.3 | 1.6 | 1.9 | 2.1 | 2.4 | -0.2 | 2.0 | 2.0 | 2.0 | ||||
| Effective interest rate (percent) 5/ | 3.9 | 3.2 | 2.8 | 4.1 | 0.8 | 3.9 | 5.3 | 5.1 | 5.2 | 4.7 | 5.3 | 4.9 | 5.5 | 6.1 | 5.8 | ||||
| Growth of exports of G&S (US dollar terms, in percent) | 1.5 | 30.9 | 24.3 | 13.2 | 15.7 | -23.2 | 9.1 | 20.5 | 13.0 | 11.2 | 10.4 | 6.8 | 6.6 | 6.6 | 6.8 | ||||
| Growth of imports of G&S (US dollar terms, in percent) | 15.3 | 37.5 | 32.1 | 18.7 | 20.9 | -35.5 | 8.4 | 14.2 | 9.5 | 9.2 | 8.9 | 2.4 | 6.3 | 6.2 | 6.3 | ||||
| Grant element of new public sector borrowing (in percent) | … | … | … | … | … | -1.1 | 27.3 | 22.2 | 22.4 | 27.3 | 32.5 | 21.8 | 12.4 | -3.3 | 8.3 | ||||
| Government revenues (excluding grants, in percent of GDP) | 39.2 | 39.9 | 38.9 | 35.9 | 35.6 | 36.7 | 37.5 | 39.1 | 39.4 | 39.4 | 39.4 | 39.4 | |||||||
| Aid flows (in Millions of US dollars) 7/ | 46.6 | 126.1 | 127.0 | 123.4 | 249.4 | 190.9 | 162.8 | 162.8 | 162.8 | 188.0 | 254.0 | ||||||||
| o/w Grants | 24.0 | 79.9 | 102.8 | 99.7 | 161.4 | 130.9 | 102.8 | 102.8 | 102.8 | 138.0 | 249.0 | ||||||||
| o/w Concessional loans | 22.6 | 46.2 | 24.2 | 23.7 | 88.0 | 60.0 | 60.0 | 60.0 | 60.0 | 50.0 | 5.0 | ||||||||
| Grant-equivalent financing (in percent of GDP) 8/ | … | … | … | 1.8 | 5.4 | 3.8 | 3.0 | 2.3 | 2.1 | 1.9 | 1.5 | 1.8 | |||||||
| Grant-equivalent financing (in percent of external financing) 8/ | … | … | … | 33.1 | 47.9 | 44.8 | 41.8 | 58.2 | 65.3 | 43.3 | 33.6 | 42.0 | |||||||
| Memorandum items: | |||||||||||||||||||
| Nominal GDP (Millions of US dollars) | 3408.4 | 4401.1 | 6054.8 | 5359.0 | 5094.8 | 5330.4 | 5705.7 | 6119.2 | 6581.8 | 8841.5 | 15953.7 | ||||||||
| Nominal dollar GDP growth | 14.1 | 29.1 | 37.6 | -11.5 | -4.9 | 4.6 | 7.0 | 7.2 | 7.6 | 1.7 | 6.1 | 6.1 | 6.1 | ||||||
| PV of PPG external debt (in Millions of US dollars) | 900.8 | 1044.9 | 1298.0 | 1514.4 | 1713.4 | 1768.2 | 1799.2 | 1976.8 | 3533.7 | ||||||||||
| (PVt-PVt-1)/GDPt-1 (in percent) | 2.4 | 4.7 | 4.2 | 3.7 | 1.0 | 0.5 | 2.8 | 0.7 | 1.1 | 1.0 | |||||||||
Includes both public and private sector external debt.
Derived as [r - g - ρ(1+g)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = 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.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
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).
Moldova: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2009-2029
(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.
Moldova: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2009-2029
(In percent)
| Projections | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2029 | |
| PV of debt-to GDP ratio | ||||||||||||
| Baseline | 22 | 26 | 29 | 31 | 29 | 28 | 26 | 25 | 24 | 23 | 23 | 22 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 22 | 16 | 13 | 11 | 9 | 7 | 7 | 5 | 5 | 5 | 4 | 5 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 22 | 29 | 33 | 36 | 35 | 34 | 33 | 32 | 31 | 31 | 31 | 34 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 22 | 24 | 26 | 27 | 25 | 22 | 20 | 18 | 16 | 15 | 14 | 14 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 22 | 28 | 42 | 42 | 39 | 36 | 34 | 31 | 28 | 26 | 24 | 16 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 22 | 24 | 28 | 28 | 26 | 24 | 21 | 19 | 17 | 16 | 15 | 15 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 22 | 35 | 49 | 48 | 46 | 42 | 40 | 37 | 33 | 30 | 28 | 17 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 22 | 25 | 36 | 36 | 34 | 31 | 29 | 27 | 24 | 22 | 20 | 14 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 22 | 35 | 38 | 39 | 36 | 32 | 29 | 26 | 23 | 22 | 20 | 21 |
| PV of debt-to-exports ratio | ||||||||||||
| Baseline | 61 | 64 | 61 | 62 | 57 | 52 | 49 | 46 | 44 | 42 | 41 | 38 |
| PV of debt-to-exports ratio | ||||||||||||
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 61 | 40 | 28 | 23 | 17 | 14 | 12 | 10 | 9 | 8 | 8 | 9 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 61 | 72 | 70 | 72 | 68 | 64 | 61 | 59 | 57 | 56 | 56 | 58 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 61 | 59 | 55 | 53 | 47 | 41 | 37 | 32 | 29 | 27 | 25 | 24 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 61 | 77 | 123 | 117 | 106 | 95 | 87 | 80 | 72 | 65 | 60 | 38 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 61 | 59 | 55 | 53 | 47 | 41 | 37 | 32 | 29 | 27 | 25 | 24 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 61 | 86 | 103 | 97 | 89 | 80 | 74 | 68 | 61 | 55 | 50 | 28 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 61 | 71 | 100 | 95 | 86 | 77 | 71 | 64 | 58 | 53 | 48 | 32 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 61 | 59 | 55 | 53 | 47 | 41 | 37 | 32 | 29 | 27 | 25 | 24 |
| Debt service-to-exports ratio | ||||||||||||
| Baseline | 60 | 73 | 78 | 82 | 75 | 70 | 67 | 64 | 61 | 59 | 57 | 57 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 60 | 46 | 36 | 30 | 22 | 19 | 17 | 14 | 12 | 12 | 11 | 13 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 60 | 82 | 90 | 95 | 89 | 85 | 83 | 81 | 79 | 79 | 78 | 86 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 60 | 68 | 71 | 71 | 63 | 56 | 51 | 45 | 41 | 38 | 35 | 37 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 60 | 79 | 114 | 112 | 101 | 92 | 86 | 79 | 72 | 66 | 61 | 40 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 60 | 67 | 76 | 76 | 67 | 60 | 54 | 48 | 44 | 40 | 38 | 39 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 60 | 98 | 132 | 129 | 117 | 108 | 101 | 93 | 85 | 77 | 71 | 42 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 60 | 71 | 98 | 96 | 87 | 79 | 74 | 68 | 62 | 56 | 52 | 36 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 60 | 99 | 103 | 103 | 91 | 82 | 73 | 66 | 60 | 55 | 51 | 53 |
| Debt service-to-exports ratio | ||||||||||||
| Baseline | 5 | 4 | 3 | 4 | 4 | 3 | 3 | 4 | 5 | 5 | 5 | 5 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 5 | 3 | 2 | 2 | 2 | 1 | 1 | 2 | 1 | 1 | 1 | 1 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 5 | 4 | 4 | 4 | 4 | 4 | 4 | 5 | 5 | 5 | 4 | 6 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 5 | 4 | 3 | 3 | 3 | 3 | 3 | 4 | 4 | 4 | 4 | 3 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 5 | 5 | 5 | 6 | 6 | 5 | 5 | 7 | 9 | 9 | 8 | 6 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 5 | 4 | 3 | 3 | 3 | 3 | 3 | 4 | 4 | 4 | 4 | 3 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 5 | 4 | 4 | 5 | 5 | 4 | 4 | 6 | 8 | 7 | 7 | 4 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 5 | 4 | 4 | 5 | 5 | 4 | 4 | 6 | 7 | 7 | 7 | 5 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 5 | 4 | 3 | 3 | 3 | 3 | 3 | 4 | 4 | 4 | 4 | 3 |
| Debt service-to-revenue ratio | ||||||||||||
| Baseline | 5 | 5 | 4 | 5 | 5 | 4 | 5 | 6 | 7 | 7 | 7 | 7 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 5 | 4 | 3 | 3 | 2 | 2 | 2 | 2 | 2 | 2 | 1 | 1 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 5 | 5 | 5 | 6 | 6 | 5 | 6 | 6 | 6 | 6 | 6 | 9 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 5 | 5 | 4 | 5 | 5 | 4 | 4 | 5 | 6 | 6 | 6 | 5 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 5 | 5 | 5 | 6 | 6 | 5 | 5 | 7 | 9 | 9 | 9 | 6 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 5 | 5 | 5 | 5 | 5 | 4 | 4 | 6 | 6 | 6 | 6 | 5 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 5 | 5 | 5 | 6 | 6 | 6 | 6 | 9 | 10 | 10 | 10 | 6 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 5 | 4 | 4 | 5 | 5 | 5 | 5 | 6 | 8 | 8 | 7 | 5 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 5 | 7 | 6 | 7 | 7 | 6 | 6 | 8 | 8 | 8 | 8 | 7 |
| Memorandum item: | ||||||||||||
| Grant element assumed on residual financing (i.e., financing required above baseline) 6/ | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 |
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.
Moldova: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2009-2029
(In percent)
| Projections | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2029 | |
| PV of debt-to GDP ratio | ||||||||||||
| Baseline | 22 | 26 | 29 | 31 | 29 | 28 | 26 | 25 | 24 | 23 | 23 | 22 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 22 | 16 | 13 | 11 | 9 | 7 | 7 | 5 | 5 | 5 | 4 | 5 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 22 | 29 | 33 | 36 | 35 | 34 | 33 | 32 | 31 | 31 | 31 | 34 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 22 | 24 | 26 | 27 | 25 | 22 | 20 | 18 | 16 | 15 | 14 | 14 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 22 | 28 | 42 | 42 | 39 | 36 | 34 | 31 | 28 | 26 | 24 | 16 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 22 | 24 | 28 | 28 | 26 | 24 | 21 | 19 | 17 | 16 | 15 | 15 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 22 | 35 | 49 | 48 | 46 | 42 | 40 | 37 | 33 | 30 | 28 | 17 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 22 | 25 | 36 | 36 | 34 | 31 | 29 | 27 | 24 | 22 | 20 | 14 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 22 | 35 | 38 | 39 | 36 | 32 | 29 | 26 | 23 | 22 | 20 | 21 |
| PV of debt-to-exports ratio | ||||||||||||
| Baseline | 61 | 64 | 61 | 62 | 57 | 52 | 49 | 46 | 44 | 42 | 41 | 38 |
| PV of debt-to-exports ratio | ||||||||||||
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 61 | 40 | 28 | 23 | 17 | 14 | 12 | 10 | 9 | 8 | 8 | 9 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 61 | 72 | 70 | 72 | 68 | 64 | 61 | 59 | 57 | 56 | 56 | 58 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 61 | 59 | 55 | 53 | 47 | 41 | 37 | 32 | 29 | 27 | 25 | 24 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 61 | 77 | 123 | 117 | 106 | 95 | 87 | 80 | 72 | 65 | 60 | 38 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 61 | 59 | 55 | 53 | 47 | 41 | 37 | 32 | 29 | 27 | 25 | 24 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 61 | 86 | 103 | 97 | 89 | 80 | 74 | 68 | 61 | 55 | 50 | 28 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 61 | 71 | 100 | 95 | 86 | 77 | 71 | 64 | 58 | 53 | 48 | 32 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 61 | 59 | 55 | 53 | 47 | 41 | 37 | 32 | 29 | 27 | 25 | 24 |
| Debt service-to-exports ratio | ||||||||||||
| Baseline | 60 | 73 | 78 | 82 | 75 | 70 | 67 | 64 | 61 | 59 | 57 | 57 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 60 | 46 | 36 | 30 | 22 | 19 | 17 | 14 | 12 | 12 | 11 | 13 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 60 | 82 | 90 | 95 | 89 | 85 | 83 | 81 | 79 | 79 | 78 | 86 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 60 | 68 | 71 | 71 | 63 | 56 | 51 | 45 | 41 | 38 | 35 | 37 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 60 | 79 | 114 | 112 | 101 | 92 | 86 | 79 | 72 | 66 | 61 | 40 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 60 | 67 | 76 | 76 | 67 | 60 | 54 | 48 | 44 | 40 | 38 | 39 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 60 | 98 | 132 | 129 | 117 | 108 | 101 | 93 | 85 | 77 | 71 | 42 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 60 | 71 | 98 | 96 | 87 | 79 | 74 | 68 | 62 | 56 | 52 | 36 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 60 | 99 | 103 | 103 | 91 | 82 | 73 | 66 | 60 | 55 | 51 | 53 |
| Debt service-to-exports ratio | ||||||||||||
| Baseline | 5 | 4 | 3 | 4 | 4 | 3 | 3 | 4 | 5 | 5 | 5 | 5 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 5 | 3 | 2 | 2 | 2 | 1 | 1 | 2 | 1 | 1 | 1 | 1 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 5 | 4 | 4 | 4 | 4 | 4 | 4 | 5 | 5 | 5 | 4 | 6 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 5 | 4 | 3 | 3 | 3 | 3 | 3 | 4 | 4 | 4 | 4 | 3 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 5 | 5 | 5 | 6 | 6 | 5 | 5 | 7 | 9 | 9 | 8 | 6 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 5 | 4 | 3 | 3 | 3 | 3 | 3 | 4 | 4 | 4 | 4 | 3 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 5 | 4 | 4 | 5 | 5 | 4 | 4 | 6 | 8 | 7 | 7 | 4 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 5 | 4 | 4 | 5 | 5 | 4 | 4 | 6 | 7 | 7 | 7 | 5 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 5 | 4 | 3 | 3 | 3 | 3 | 3 | 4 | 4 | 4 | 4 | 3 |
| Debt service-to-revenue ratio | ||||||||||||
| Baseline | 5 | 5 | 4 | 5 | 5 | 4 | 5 | 6 | 7 | 7 | 7 | 7 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 5 | 4 | 3 | 3 | 2 | 2 | 2 | 2 | 2 | 2 | 1 | 1 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 5 | 5 | 5 | 6 | 6 | 5 | 6 | 6 | 6 | 6 | 6 | 9 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 5 | 5 | 4 | 5 | 5 | 4 | 4 | 5 | 6 | 6 | 6 | 5 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 5 | 5 | 5 | 6 | 6 | 5 | 5 | 7 | 9 | 9 | 9 | 6 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 5 | 5 | 5 | 5 | 5 | 4 | 4 | 6 | 6 | 6 | 6 | 5 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 5 | 5 | 5 | 6 | 6 | 6 | 6 | 9 | 10 | 10 | 10 | 6 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 5 | 4 | 4 | 5 | 5 | 5 | 5 | 6 | 8 | 8 | 7 | 5 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 5 | 7 | 6 | 7 | 7 | 6 | 6 | 8 | 8 | 8 | 8 | 7 |
| Memorandum item: | ||||||||||||
| Grant element assumed on residual financing (i.e., financing required above baseline) 6/ | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 |
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.
Moldova: Public Sector Debt Sustainability Framework, Baseline Scenario, 2006-2029
(In percent of GDP, unless otherwise indicated)
General government gross debt, excluding 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.
Moldova: Public Sector Debt Sustainability Framework, Baseline Scenario, 2006-2029
(In percent of GDP, unless otherwise indicated)
| Actual | Estimate | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | Average | Standard Deviation | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2009-14 Average |
2019 | 2029 | 2015-29 Average |
||||
| Public sector debt 1/ | 34.0 | 26.8 | 21.3 | 30.9 | 37.0 | 39.7 | 41.0 | 38.7 | 36.2 | 29.7 | 25.5 | |||||||
| o/w foreign-currency denominated | 25.6 | 19.8 | 15.7 | 22.4 | 28.7 | 32.3 | 34.6 | 33.1 | 31.3 | 25.7 | 23.1 | |||||||
| Change in public sector debt | -3.6 | -7.2 | -5.5 | 9.6 | 6.0 | 2.7 | 1.3 | -2.3 | -2.5 | -1.0 | -0.6 | |||||||
| Identified debt-creating flows | -6.0 | -8.5 | -6.3 | 12.9 | 5.1 | 2.4 | -0.3 | -2.3 | -2.0 | -0.9 | -0.7 | |||||||
| Primary deficit | -1.3 | -1.0 | -0.2 | -2.0 | 3.5 | 7.5 | 5.5 | 3.6 | 1.7 | 0.3 | -0.2 | 3.1 | -0.1 | -0.2 | -0.2 | |||
| Revenue and grants | 39.9 | 41.7 | 40.6 | 37.8 | 38.8 | 39.2 | 39.3 | 40.8 | 41.0 | 41.0 | 41.0 | |||||||
| of which: grants | 0.7 | 1.8 | 1.7 | 1.9 | 3.2 | 2.5 | 1.8 | 1.7 | 1.6 | 1.6 | 1.6 | |||||||
| Primary (noninterest) expenditure | 38.6 | 40.8 | 40.4 | 45.3 | 44.3 | 42.8 | 41.0 | 41.0 | 40.8 | 40.8 | 40.7 | |||||||
| Automatic debt dynamics | -4.3 | -7.3 | -4.2 | 5.8 | 0.2 | -0.6 | -1.4 | -1.9 | -1.7 | -0.8 | -0.4 | |||||||
| Contribution from interest rate/growth differential | -3.7 | -6.0 | -5.3 | 3.9 | 2.1 | -0.4 | -1.5 | -1.7 | -1.7 | -0.8 | -0.4 | |||||||
| of which: contribution from average real interest rate | -2.0 | -5.0 | -3.4 | 1.7 | 2.5 | 0.6 | 0.4 | 0.3 | 0.1 | 0.4 | 0.6 | |||||||
| of which: contribution from real GDP growth | -1.7 | -1.0 | -1.9 | 2.1 | -0.5 | -1.1 | -1.9 | -2.0 | -1.8 | -1.2 | -1.0 | |||||||
| Contribution from real exchange rate depreciation | -0.6 | -1.3 | 1.1 | 2.0 | -1.9 | -0.2 | 0.1 | -0.2 | 0.0 | … | … | |||||||
| Other identified debt-creating flows | -0.4 | -0.3 | -1.9 | -0.4 | -0.6 | -0.6 | -0.6 | -0.7 | -0.1 | 0.0 | 0.0 | |||||||
| Privatization receipts (negative) | -0.4 | -0.3 | -1.9 | -0.4 | -0.6 | -0.6 | -0.6 | -0.7 | -0.1 | 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 | |||||||
| Debt relief (HPC and other) | 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 | |||||||
| Residual, including asset changes | 2.3 | 1.3 | 0.8 | -3.3 | 0.9 | 0.4 | 1.6 | 0.0 | -0.5 | 0.0 | 0.1 | |||||||
| Other Sustainability Indicators | ||||||||||||||||||
| PV of public sector debt | 8.5 | 7.0 | 20.5 | 30.2 | 34.3 | 36.2 | 37.0 | 34.9 | 32.6 | 26.6 | 24.8 | |||||||
| o/w foreign-currency denominated | 0.0 | 0.0 | 14.9 | 21.6 | 26.0 | 28.8 | 30.6 | 29.2 | 27.6 | 22.6 | 22.4 | |||||||
| o/w external | … | … | 14.9 | 21.6 | 26.0 | 28.8 | 30.6 | 29.2 | 27.6 | 22.6 | 22.4 | |||||||
| PV of contingent liabilities (not included in public sector debt) | … | … | … | … | … | … | … | … | … | … | … | … | ||||||
| Gross financing need 2/ | 6.9 | 4.8 | 4.9 | 12.9 | 15.2 | 13.3 | 10.7 | 8.7 | 7.3 | 6.9 | 5.2 | |||||||
| PV of public sector debt-to-revenue and grants ratio (in percent) | 21.2 | 16.8 | 50.4 | 79.9 | 88.3 | 92.4 | 94.2 | 85.5 | 79.4 | 64.9 | 60.6 | |||||||
| PV of public sector debt-to-revenue ratio (in percent) | 21.6 | 17.6 | 52.7 | 84.1 | 96.2 | 98.5 | 98.7 | 89.2 | 82.6 | 67.5 | 63.0 | |||||||
| o/w external 3/ | 38.3 | 60.2 | 73.0 | 78.5 | 81.6 | 74.7 | 70.1 | 57.3 | 56.8 | |||||||||
| Debt service-to-revenue and grants ratio (in percent) 4/ | 9.2 | 6.9 | 6.0 | 7.2 | 6.8 | 7.0 | 7.0 | 6.6 | 6.0 | 8.0 | 7.6 | |||||||
| Debt service-to-revenue ratio (in percent) 4/ | 9.3 | 7.2 | 6.3 | 7.6 | 7.4 | 7.4 | 7.3 | 6.9 | 6.2 | 8.3 | 7.9 | |||||||
| Primary deficit that stabilizes the debt-to-GDP ratio | 2.3 | 6.2 | 5.3 | -2.1 | -0.5 | 0.8 | 0.3 | 2.6 | 2.3 | 0.8 | 0.3 | |||||||
| Key macroeconomic and fiscal assumptions Real GDP growth (in percent) | 4.8 | 3.0 | 7.8 | 5.0 | 3.6 | -9.0 | 1.5 | 3.0 | 5.0 | 5.0 | 5.0 | 1.8 | 4.0 | 4.0 | 4.0 | |||
| Average nominal interest rate on forex debt (in percent) | 3.3 | 1.9 | 1.8 | 3.3 | 1.1 | 2.3 | 2.5 | 2.1 | 2.1 | 1.9 | 1.9 | 2.2 | 2.2 | 3.5 | 2.6 | |||
| Average real interest rate on domestic debt (in percent) | -6.6 | -3.8 | 5.4 | -0.5 | 4.8 | 13.8 | 5.5 | 6.1 | 5.5 | 5.5 | 5.8 | 7.0 | 7.6 | 10.0 | 8.3 | |||
| Real exchange rate depreciation (in percent, + indicates depreciation) | -2.4 | -6.5 | 7.6 | -3.7 | 10.5 | 10.8 | … | … | … | … | … | … | … | … | … | |||
| Inflation rate (GDP deflator, in percent) | 13.4 | 15.9 | 9.2 | 16.0 | 10.1 | 3.9 | 6.5 | 4.7 | 4.7 | 4.3 | 4.0 | 4.7 | 4.0 | 4.0 | 4.0 | |||
| Growth of real primary spending (deflated by GDP deflator, in percent) | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| Grant element of new external borrowing (in percent) | -1.1 | 27.3 | 22.2 | 22.4 | 27.3 | 32.5 | 21.8 | 12.4 | -3.3 | … | ||||||||
General government gross debt, excluding 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.
Moldova: Public Sector Debt Sustainability Framework, Baseline Scenario, 2006-2029
(In percent of GDP, unless otherwise indicated)
| Actual | Estimate | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | Average | Standard Deviation | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2009-14 Average |
2019 | 2029 | 2015-29 Average |
||||
| Public sector debt 1/ | 34.0 | 26.8 | 21.3 | 30.9 | 37.0 | 39.7 | 41.0 | 38.7 | 36.2 | 29.7 | 25.5 | |||||||
| o/w foreign-currency denominated | 25.6 | 19.8 | 15.7 | 22.4 | 28.7 | 32.3 | 34.6 | 33.1 | 31.3 | 25.7 | 23.1 | |||||||
| Change in public sector debt | -3.6 | -7.2 | -5.5 | 9.6 | 6.0 | 2.7 | 1.3 | -2.3 | -2.5 | -1.0 | -0.6 | |||||||
| Identified debt-creating flows | -6.0 | -8.5 | -6.3 | 12.9 | 5.1 | 2.4 | -0.3 | -2.3 | -2.0 | -0.9 | -0.7 | |||||||
| Primary deficit | -1.3 | -1.0 | -0.2 | -2.0 | 3.5 | 7.5 | 5.5 | 3.6 | 1.7 | 0.3 | -0.2 | 3.1 | -0.1 | -0.2 | -0.2 | |||
| Revenue and grants | 39.9 | 41.7 | 40.6 | 37.8 | 38.8 | 39.2 | 39.3 | 40.8 | 41.0 | 41.0 | 41.0 | |||||||
| of which: grants | 0.7 | 1.8 | 1.7 | 1.9 | 3.2 | 2.5 | 1.8 | 1.7 | 1.6 | 1.6 | 1.6 | |||||||
| Primary (noninterest) expenditure | 38.6 | 40.8 | 40.4 | 45.3 | 44.3 | 42.8 | 41.0 | 41.0 | 40.8 | 40.8 | 40.7 | |||||||
| Automatic debt dynamics | -4.3 | -7.3 | -4.2 | 5.8 | 0.2 | -0.6 | -1.4 | -1.9 | -1.7 | -0.8 | -0.4 | |||||||
| Contribution from interest rate/growth differential | -3.7 | -6.0 | -5.3 | 3.9 | 2.1 | -0.4 | -1.5 | -1.7 | -1.7 | -0.8 | -0.4 | |||||||
| of which: contribution from average real interest rate | -2.0 | -5.0 | -3.4 | 1.7 | 2.5 | 0.6 | 0.4 | 0.3 | 0.1 | 0.4 | 0.6 | |||||||
| of which: contribution from real GDP growth | -1.7 | -1.0 | -1.9 | 2.1 | -0.5 | -1.1 | -1.9 | -2.0 | -1.8 | -1.2 | -1.0 | |||||||
| Contribution from real exchange rate depreciation | -0.6 | -1.3 | 1.1 | 2.0 | -1.9 | -0.2 | 0.1 | -0.2 | 0.0 | … | … | |||||||
| Other identified debt-creating flows | -0.4 | -0.3 | -1.9 | -0.4 | -0.6 | -0.6 | -0.6 | -0.7 | -0.1 | 0.0 | 0.0 | |||||||
| Privatization receipts (negative) | -0.4 | -0.3 | -1.9 | -0.4 | -0.6 | -0.6 | -0.6 | -0.7 | -0.1 | 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 | |||||||
| Debt relief (HPC and other) | 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 | |||||||
| Residual, including asset changes | 2.3 | 1.3 | 0.8 | -3.3 | 0.9 | 0.4 | 1.6 | 0.0 | -0.5 | 0.0 | 0.1 | |||||||
| Other Sustainability Indicators | ||||||||||||||||||
| PV of public sector debt | 8.5 | 7.0 | 20.5 | 30.2 | 34.3 | 36.2 | 37.0 | 34.9 | 32.6 | 26.6 | 24.8 | |||||||
| o/w foreign-currency denominated | 0.0 | 0.0 | 14.9 | 21.6 | 26.0 | 28.8 | 30.6 | 29.2 | 27.6 | 22.6 | 22.4 | |||||||
| o/w external | … | … | 14.9 | 21.6 | 26.0 | 28.8 | 30.6 | 29.2 | 27.6 | 22.6 | 22.4 | |||||||
| PV of contingent liabilities (not included in public sector debt) | … | … | … | … | … | … | … | … | … | … | … | … | ||||||
| Gross financing need 2/ | 6.9 | 4.8 | 4.9 | 12.9 | 15.2 | 13.3 | 10.7 | 8.7 | 7.3 | 6.9 | 5.2 | |||||||
| PV of public sector debt-to-revenue and grants ratio (in percent) | 21.2 | 16.8 | 50.4 | 79.9 | 88.3 | 92.4 | 94.2 | 85.5 | 79.4 | 64.9 | 60.6 | |||||||
| PV of public sector debt-to-revenue ratio (in percent) | 21.6 | 17.6 | 52.7 | 84.1 | 96.2 | 98.5 | 98.7 | 89.2 | 82.6 | 67.5 | 63.0 | |||||||
| o/w external 3/ | 38.3 | 60.2 | 73.0 | 78.5 | 81.6 | 74.7 | 70.1 | 57.3 | 56.8 | |||||||||
| Debt service-to-revenue and grants ratio (in percent) 4/ | 9.2 | 6.9 | 6.0 | 7.2 | 6.8 | 7.0 | 7.0 | 6.6 | 6.0 | 8.0 | 7.6 | |||||||
| Debt service-to-revenue ratio (in percent) 4/ | 9.3 | 7.2 | 6.3 | 7.6 | 7.4 | 7.4 | 7.3 | 6.9 | 6.2 | 8.3 | 7.9 | |||||||
| Primary deficit that stabilizes the debt-to-GDP ratio | 2.3 | 6.2 | 5.3 | -2.1 | -0.5 | 0.8 | 0.3 | 2.6 | 2.3 | 0.8 | 0.3 | |||||||
| Key macroeconomic and fiscal assumptions Real GDP growth (in percent) | 4.8 | 3.0 | 7.8 | 5.0 | 3.6 | -9.0 | 1.5 | 3.0 | 5.0 | 5.0 | 5.0 | 1.8 | 4.0 | 4.0 | 4.0 | |||
| Average nominal interest rate on forex debt (in percent) | 3.3 | 1.9 | 1.8 | 3.3 | 1.1 | 2.3 | 2.5 | 2.1 | 2.1 | 1.9 | 1.9 | 2.2 | 2.2 | 3.5 | 2.6 | |||
| Average real interest rate on domestic debt (in percent) | -6.6 | -3.8 | 5.4 | -0.5 | 4.8 | 13.8 | 5.5 | 6.1 | 5.5 | 5.5 | 5.8 | 7.0 | 7.6 | 10.0 | 8.3 | |||
| Real exchange rate depreciation (in percent, + indicates depreciation) | -2.4 | -6.5 | 7.6 | -3.7 | 10.5 | 10.8 | … | … | … | … | … | … | … | … | … | |||
| Inflation rate (GDP deflator, in percent) | 13.4 | 15.9 | 9.2 | 16.0 | 10.1 | 3.9 | 6.5 | 4.7 | 4.7 | 4.3 | 4.0 | 4.7 | 4.0 | 4.0 | 4.0 | |||
| Growth of real primary spending (deflated by GDP deflator, in percent) | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| Grant element of new external borrowing (in percent) | -1.1 | 27.3 | 22.2 | 22.4 | 27.3 | 32.5 | 21.8 | 12.4 | -3.3 | … | ||||||||
General government gross debt, excluding 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.
Moldova: Sensitivity Analysis for Key Indicators of Public Debt 2009-2029
Assumes that real GDP growth is at baseline minus one standard deviation divided by the square root of the length of the projection period.
Revenues are defined inclusive of grants.
Moldova: Sensitivity Analysis for Key Indicators of Public Debt 2009-2029
| Projections | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2019 | 2029 | |
| PV of Debt-to-GDP Ratio | ||||||||
| Baseline | 30 | 34 | 36 | 37 | 35 | 33 | 27 | 25 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 30 | 26 | 22 | 19 | 16 | 12 | 0 | 0 |
| A2. Primary balance is unchanged from 2009 | 30 | 36 | 42 | 49 | 53 | 58 | 87 | 146 |
| A3. Permanently lower GDP growth 1/ | 30 | 35 | 38 | 40 | 39 | 38 | 45 | 90 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 30 | 34 | 37 | 39 | 37 | 36 | 32 | 36 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 30 | 30 | 30 | 31 | 29 | 27 | 22 | 21 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 30 | 28 | 26 | 27 | 24 | 21 | 13 | 7 |
| B4. One-time 30 percent real depreciation in 2010 | 30 | 43 | 45 | 45 | 43 | 41 | 35 | 38 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 30 | 44 | 46 | 47 | 44 | 42 | 35 | 32 |
| PV of Debt-to-Revenue Ratio 2/ | ||||||||
| Baseline | 80 | 88 | 92 | 94 | 85 | 79 | 65 | 61 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 80 | 67 | 56 | 49 | 39 | 30 | 0 | 0 |
| A2. Primary balance is unchanged from 2009 | 80 | 94 | 108 | 124 | 131 | 142 | 212 | 356 |
| A3. Permanently lower GDP growth 1/ | 80 | 90 | 96 | 101 | 95 | 93 | 109 | 217 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 80 | 88 | 95 | 99 | 91 | 87 | 79 | 87 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 80 | 78 | 77 | 79 | 71 | 66 | 53 | 50 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 80 | 72 | 67 | 68 | 59 | 52 | 32 | 17 |
| B4. One-time 30 percent real depreciation in 2010 | 80 | 112 | 114 | 115 | 105 | 99 | 86 | 93 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 80 | 114 | 118 | 119 | 108 | 101 | 85 | 77 |
| Debt Service-to-Revenue Ratio 2/ | ||||||||
| Baseline | 7 | 7 | 7 | 7 | 7 | 6 | 8 | 8 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 7 | 7 | 6 | 5 | 4 | 4 | 2 | 0 |
| A2. Primary balance is unchanged from 2009 | 7 | 7 | 7 | 8 | 8 | 8 | 17 | 34 |
| A3. Permanently lower GDP growth 1/ | 7 | 7 | 7 | 7 | 7 | 7 | 11 | 20 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 7 | 7 | 7 | 7 | 7 | 6 | 9 | 10 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 7 | 7 | 7 | 6 | 6 | 5 | 7 | 7 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 7 | 7 | 6 | 6 | 5 | 5 | 5 | 3 |
| B4. One-time 30 percent real depreciation in 2010 | 7 | 8 | 9 | 9 | 9 | 8 | 12 | 14 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 7 | 7 | 8 | 9 | 8 | 7 | 10 | 9 |
Assumes that real GDP growth is at baseline minus one standard deviation divided by the square root of the length of the projection period.
Revenues are defined inclusive of grants.
Moldova: Sensitivity Analysis for Key Indicators of Public Debt 2009-2029
| Projections | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2019 | 2029 | |
| PV of Debt-to-GDP Ratio | ||||||||
| Baseline | 30 | 34 | 36 | 37 | 35 | 33 | 27 | 25 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 30 | 26 | 22 | 19 | 16 | 12 | 0 | 0 |
| A2. Primary balance is unchanged from 2009 | 30 | 36 | 42 | 49 | 53 | 58 | 87 | 146 |
| A3. Permanently lower GDP growth 1/ | 30 | 35 | 38 | 40 | 39 | 38 | 45 | 90 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 30 | 34 | 37 | 39 | 37 | 36 | 32 | 36 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 30 | 30 | 30 | 31 | 29 | 27 | 22 | 21 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 30 | 28 | 26 | 27 | 24 | 21 | 13 | 7 |
| B4. One-time 30 percent real depreciation in 2010 | 30 | 43 | 45 | 45 | 43 | 41 | 35 | 38 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 30 | 44 | 46 | 47 | 44 | 42 | 35 | 32 |
| PV of Debt-to-Revenue Ratio 2/ | ||||||||
| Baseline | 80 | 88 | 92 | 94 | 85 | 79 | 65 | 61 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 80 | 67 | 56 | 49 | 39 | 30 | 0 | 0 |
| A2. Primary balance is unchanged from 2009 | 80 | 94 | 108 | 124 | 131 | 142 | 212 | 356 |
| A3. Permanently lower GDP growth 1/ | 80 | 90 | 96 | 101 | 95 | 93 | 109 | 217 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 80 | 88 | 95 | 99 | 91 | 87 | 79 | 87 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 80 | 78 | 77 | 79 | 71 | 66 | 53 | 50 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 80 | 72 | 67 | 68 | 59 | 52 | 32 | 17 |
| B4. One-time 30 percent real depreciation in 2010 | 80 | 112 | 114 | 115 | 105 | 99 | 86 | 93 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 80 | 114 | 118 | 119 | 108 | 101 | 85 | 77 |
| Debt Service-to-Revenue Ratio 2/ | ||||||||
| Baseline | 7 | 7 | 7 | 7 | 7 | 6 | 8 | 8 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 7 | 7 | 6 | 5 | 4 | 4 | 2 | 0 |
| A2. Primary balance is unchanged from 2009 | 7 | 7 | 7 | 8 | 8 | 8 | 17 | 34 |
| A3. Permanently lower GDP growth 1/ | 7 | 7 | 7 | 7 | 7 | 7 | 11 | 20 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 7 | 7 | 7 | 7 | 7 | 6 | 9 | 10 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 7 | 7 | 7 | 6 | 6 | 5 | 7 | 7 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 7 | 7 | 6 | 6 | 5 | 5 | 5 | 3 |
| B4. One-time 30 percent real depreciation in 2010 | 7 | 8 | 9 | 9 | 9 | 8 | 12 | 14 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 7 | 7 | 8 | 9 | 8 | 7 | 10 | 9 |
Assumes that real GDP growth is at baseline minus one standard deviation divided by the square root of the length of the projection period.
Revenues are defined inclusive of grants.
8. While rebound in exports, fiscal consolidation and significant levels of remittances should ensure that adequate resources for public debt service remain available, certain risks exist. While none of the indicators of debt service breaches the threshold, some liquidity pressures could emerge in the medium term when the repurchases of the ECF and the EFF are falling due as shown by an increase in ratios of debt service to exports and revenues under the extreme scenarios. In addition, significant private external debt implies that private borrowers would compete with the public sector for foreign exchange needed to service their external debt.
VII. Public Debt Sustainability under the Baseline and Alternative Scenarios
9. Under the baseline, the ratios of total public debt do not signal increased vulnerability at present. Total public debt consists mainly of external PPG debt (72 percent) hence it follows closely the dynamics of its external component. Under the baseline scenario, after the initial increase over the medium-term, the PV of total public debt-to-GDP ratio will decline to 24 percent, while the PV of debt service to revenue ratio would fluctuate around 7 percent.
10. The most significant increase of public debt indicators would materialize if the primary balance remains at the unsustainable 2009 level. Large and persistent primary gap would then lead to an explosive debt dynamics. However, the ongoing process of fiscal consolidation, combined with binding financing constraints should result in a structural reversal of the fiscal position, rendering such scenario less probable.
11. Two stress scenarios could result in a sharp increase of public debt indicators. Permanently lower GDP growth results in an ever-increasing PV of debt-to-GDP ratio reaching 87 percent in 2029, almost three times larger compared to the current level. A sharp real exchange rate depreciation could result in a spike in public sector debt but this increase would be temporary, and debt dynamics would revert to a benign pattern in the medium term.
VIII. Scenarios with Additional Non-Concessional Borrowing
12. This section explores alternative scenarios where the government increases its non-concessional borrowing by additional US$125 million a year over ten years.15 The non-concessional resources could be invested in infrastructure upgrades (e.g., roads, energy supply and distribution, water treatment, and agricultural irrigation). It is assumed that the loans will be repaid within 15 years, with 3 year grace period, and will carry an interest rate of 3 percent per annum.
Scenario 1
13. The first scenario envisages that the additional borrowing will contribute to a higher real growth rate of GDP in the medium and long term than under the baseline scenario. In the absence of specific information on the projects to be financed with new loans, it is conservatively assumed that their “domestic component” will be about 30 percent, while the remaining amount will directly translate into increased imports. Given large spare capacities in the economy after the crisis, the projects’ implementation can directly contribute to the GDP growth without rekindling inflation pressures. Therefore in the medium term, annual growth could rise by 0.5–0.6 percent under a conservative scenario, mainly as a result of higher investment, employment, and consumption during project implementation years. Additional infrastructure investment will also raise the economy’s capital stock and boost productivity, ensuring higher growth in the long run (4.5 percent, or 0.5 percentage points higher than under the baseline).
14. Exports and FDI will initially rise only in line with GDP, but then will accelerate in the long run, compared with the baseline scenario. Modest initial growth will reflect lags in improvements in infrastructure. In the long run, better infrastructure will improve Moldova’s attractiveness to foreign investors, raising FDI to 9 percent of GDP and exports of goods to 43 percent of GDP.
15. Imports will accelerate substantially over the course of the operation, causing initial deterioration of the current account (Figures 3A–4A, Tables 5A–8A). In the long run, however, Moldova’s reliance on imported energy will decrease due to new investment, contributing to a stabilization of imports at 79 percent relative to GDP. The current account in the long term will remain broadly unchanged from the baseline scenario (Section III).
Moldova: Indicators of Public and Publicly Guaranteed External Debt with Additional Non-Concessional Borrowing, and Positive Impact on Growth, 2009-2029 1/
Citation: IMF Staff Country Reports 2010, 032; 10.5089/9781451825190.002.A002
Sources: Country authorities; and staff estimates and projections.1/ The most extreme stress test is the test that yields the highest ratio in 2019. In figure b. it corresponds to a Terms shock; in c. to a Exports shock; in d. to a Terms shock; in e. to a Exports shock and in figure f. to a Non-debt flows shockMoldova: Indicators of Public Debt with Additional Non-Concessional Borrowing, and Positive Impact on Growth, 2009-2029 1/
Citation: IMF Staff Country Reports 2010, 032; 10.5089/9781451825190.002.A002
Sources: Country authorities; and staff estimates and projections.1/ The most extreme stress test is the test that yields the highest ratio in 2019.2/ Revenues are defined inclusive of grants.External Debt Sustainability Framework with Additional Non-Concessional Borrowing, and Positive Impact on Growth, 2009-2029 1/
(In percent of GDP, unless otherwise indicated)
Includes both public and private sector external debt.
Derived as [r - g - ρ(1+g)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = 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.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
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).
External Debt Sustainability Framework with Additional Non-Concessional Borrowing, and Positive Impact on Growth, 2009-2029 1/
(In percent of GDP, unless otherwise indicated)
| Actual | Historical Average | Standard Deviation | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2009-2014 Average | 2019 | 2029 | 2015-2029 Average | |||||||
| External debt (nominal) 1/ | 64.7 | 62.7 | 55.9 | 68.1 | 81.0 | 87.7 | 91.3 | 90.8 | 89.7 | 85.7 | 65.5 | ||||||||
| o/w public and publicly guaranteed (PPG) | 25.6 | 19.8 | 15.7 | 22.4 | 30.7 | 36.4 | 40.4 | 40.2 | 39.5 | 37.6 | 24.0 | ||||||||
| Change in external debt | 2.5 | -2.0 | -6.8 | 12.2 | 12.9 | 6.6 | 3.6 | -0.5 | -1.2 | -0.9 | -1.5 | ||||||||
| Identified net debt-creating flows | -2.1 | -9.3 | -10.7 | 13.9 | 8.2 | 7.4 | 4.6 | 2.7 | 2.0 | -0.1 | -2.7 | ||||||||
| Non-interest current account deficit | 10.3 | 15.5 | 16.6 | 6.0 | 6.6 | 7.5 | 9.8 | 11.1 | 10.1 | 9.3 | 8.7 | 7.0 | 5.2 | 6.6 | |||||
| Deficit in balance of goods and services | 47.1 | 52.5 | 53.0 | 33.0 | 39.0 | 40.3 | 39.8 | 39.6 | 39.4 | 36.7 | 32.7 | ||||||||
| Exports | 44.8 | 45.4 | 41.0 | 35.6 | 41.1 | 47.3 | 50.0 | 52.0 | 53.5 | 58.2 | 61.2 | ||||||||
| Imports | 91.9 | 97.9 | 94.0 | 68.5 | 80.1 | 87.7 | 89.8 | 91.6 | 92.9 | 94.9 | 93.9 | ||||||||
| Net current transfers (negative = inflow) | -39.1 | -40.0 | -38.4 | -29.9 | 8.5 | -27.2 | -32.3 | -32.2 | -32.7 | -33.3 | -33.7 | -31.9 | -28.6 | -30.9 | |||||
| o/w official | -1.9 | -1.7 | -2.0 | -1.5 | -3.1 | -2.4 | -1.8 | -1.6 | -1.5 | -1.5 | -1.5 | ||||||||
| Other current account flows (negative = net inflow) | 2.3 | 3.0 | 1.9 | 1.7 | 3.1 | 3.0 | 3.0 | 3.0 | 3.0 | 2.2 | 1.1 | ||||||||
| Net FDI (negative = inflow) | -6.9 | -11.9 | -11.4 | -6.5 | 3.4 | -1.7 | -3.9 | -4.8 | -5.1 | -5.8 | -6.3 | -7.5 | -8.8 | -7.9 | |||||
| Endogenous debt dynamics 2/ | -5.5 | -13.0 | -15.9 | 8.1 | 2.3 | 1.1 | -0.4 | -0.8 | -0.3 | 0.4 | 0.9 | ||||||||
| Contribution from nominal interest rate | 2.1 | 1.6 | 1.3 | 2.5 | 3.8 | 3.9 | 4.1 | 3.8 | 4.3 | 4.1 | 3.8 | ||||||||
| Contribution from real GDP growth | -2.6 | -1.5 | -3.6 | 5.7 | -1.5 | -2.7 | -4.5 | -4.7 | -4.6 | -3.7 | -2.8 | ||||||||
| Contribution from price and exchange rate changes | -5.1 | -13.1 | -13.6 | … | … | … | … | … | … | … | … | ||||||||
| Residual (3-4) 3/ | 4.7 | 7.3 | 3.9 | -1.7 | 4.7 | -0.8 | -1.0 | -3.1 | -3.2 | -0.8 | 1.2 | ||||||||
| o/w exceptional financing | -2.5 | -3.1 | -2.6 | -1.3 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
| PV of external debt 4/ | … | … | 55.1 | 67.4 | 78.2 | 83.9 | 86.9 | 86.5 | 85.6 | 82.0 | 64.9 | ||||||||
| In percent of exports | … | … | 134.3 | 189.3 | 190.2 | 177.3 | 173.8 | 166.6 | 160.0 | 140.9 | 106.0 | ||||||||
| PV of PPG external debt | … | … | 14.9 | 21.6 | 27.9 | 32.6 | 35.9 | 35.9 | 35.4 | 33.9 | 23.3 | ||||||||
| In percent of exports | … | … | 36.3 | 60.7 | 67.9 | 69.0 | 71.9 | 69.2 | 66.1 | 58.2 | 38.1 | ||||||||
| In percent of government revenues | … | … | 38.3 | 60.2 | 78.8 | 89.8 | 97.5 | 93.9 | 92.0 | 90.4 | 65.1 | ||||||||
| Debt service-to-exports ratio (in percent) | 15.1 | 13.7 | 16.6 | 19 | 20 | 17 | 18 | 17 | 19 | 23.7 | 22.9 | ||||||||
| PPG debt service-to-exports ratio (in percent) | 7.0 | 3.9 | 3.3 | 4.7 | 4.0 | 3.4 | 3.7 | 3.9 | 3.8 | 6.1 | 5.2 | ||||||||
| PPG debt service-to-revenue ratio (in percent) | 8.0 | 4.4 | 3.5 | 4.6 | 4.7 | 4.5 | 5.1 | 5.3 | 5.3 | 9.5 | 8.8 | ||||||||
| Total gross financing need (Millions of U.S. dollars) | 1118.9 | 1332.9 | 1865.3 | 2057.4 | 2100.1 | 2128.2 | 2180.6 | 2126.4 | 2215.0 | 2593.2 | 3179.9 | ||||||||
| Non-interest current account deficit that stabilizes debt ratio | 7.7 | 17.5 | 23.3 | -4.7 | -3.1 | 4.5 | 6.5 | 9.8 | 9.8 | 7.9 | 6.7 | ||||||||
| Key macroeconomic assumptions | |||||||||||||||||||
| Real GDP growth (in percent) | 4.8 | 3.0 | 7.8 | 5.0 | 3.6 | -9.0 | 2.1 | 3.6 | 5.5 | 5.5 | 5.5 | 2.2 | 4.5 | 4.5 | 4.5 | ||||
| GDP deflator in US dollar terms (change in percent) | 8.9 | 25.4 | 27.6 | 9.4 | 15.7 | -2.8 | -6.3 | 1.6 | 1.9 | 2.1 | 2.4 | -0.2 | 2.0 | 2.0 | 2.0 | ||||
| Effective interest rate (percent) 5/ | 3.9 | 3.2 | 2.8 | 4.1 | 0.8 | 3.9 | 5.3 | 5.0 | 5.0 | 4.5 | 5.1 | 4.8 | 5.0 | 6.0 | 5.4 | ||||
| Growth of exports of G&S (US dollar terms, in percent) | 1.5 | 30.9 | 24.3 | 13.2 | 15.7 | -23.2 | 10.5 | 21.1 | 13.7 | 12.0 | 11.2 | 7.5 | 8.4 | 7.1 | 7.6 | ||||
| Growth of imports of G&S (US dollar terms, in percent) | 15.3 | 37.5 | 32.1 | 18.7 | 20.9 | -35.5 | 11.8 | 15.1 | 10.2 | 9.9 | 9.6 | 3.5 | 7.0 | 6.4 | 6.7 | ||||
| Grant element of new public sector borrowing (in percent) | … | … | … | … | … | -1.1 | 23.1 | 18.1 | 18.1 | 18.0 | 19.2 | 15.9 | 10.4 | -3.3 | 6.0 | ||||
| Government revenues (excluding grants, in percent of GDP) | 39.2 | 39.9 | 38.9 | 35.9 | 35.4 | 36.3 | 36.9 | 38.3 | 38.5 | 37.5 | 35.8 | 37.0 | |||||||
| Aid flows (in Millions of US dollars) 7/ | 46.6 | 126.1 | 127.0 | 123.4 | 249.4 | 190.9 | 162.8 | 162.8 | 162.8 | 188.0 | 254.0 | ||||||||
| o/w Grants | 24.0 | 79.9 | 102.8 | 99.7 | 161.4 | 130.9 | 102.8 | 102.8 | 102.8 | 138.0 | 249.0 | ||||||||
| o/w Concessional loans | 22.6 | 46.2 | 24.2 | 23.7 | 88.0 | 60.0 | 60.0 | 60.0 | 60.0 | 50.0 | 5.0 | ||||||||
| Grant-equivalent financing (in percent of GDP) 8/ | … | … | … | 1.8 | 5.5 | 3.9 | 3.1 | 2.4 | 2.2 | 2.0 | 1.3 | 1.7 | |||||||
| Grant-equivalent financing (in percent of external financing) 8/ | … | … | … | 33.1 | 41.4 | 36.7 | 33.8 | 41.0 | 43.9 | 32.0 | 31.2 | 35.4 | |||||||
| Memorandum items: | |||||||||||||||||||
| Nominal GDP (Millions of US dollars) | 3408.4 | 4401.1 | 6054.8 | 5359.0 | 5124.3 | 5390.6 | 5799.0 | 6248.3 | 6749.8 | 9287.0 | 17580.9 | ||||||||
| Nominal dollar GDP growth | 14.1 | 29.1 | 37.6 | -11.5 | -4.4 | 5.2 | 7.6 | 7.7 | 8.0 | 2.1 | 6.6 | 6.6 | 6.6 | ||||||
| PV of PPG external debt (in Millions of US dollars) | 900.8 | 1044.9 | 1399.6 | 1732.3 | 2048.4 | 2221.3 | 2362.1 | 3115.2 | 4051.6 | ||||||||||
| (PVt-PVt-1)/GDPt-1 (in percent) | 2.4 | 6.6 | 6.5 | 5.9 | 3.0 | 2.3 | 4.4 | 2.0 | 0.7 | 1.1 | |||||||||
Includes both public and private sector external debt.
Derived as [r - g - ρ(1+g)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = 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.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
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).
External Debt Sustainability Framework with Additional Non-Concessional Borrowing, and Positive Impact on Growth, 2009-2029 1/
(In percent of GDP, unless otherwise indicated)
| Actual | Historical Average | Standard Deviation | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2009-2014 Average | 2019 | 2029 | 2015-2029 Average | |||||||
| External debt (nominal) 1/ | 64.7 | 62.7 | 55.9 | 68.1 | 81.0 | 87.7 | 91.3 | 90.8 | 89.7 | 85.7 | 65.5 | ||||||||
| o/w public and publicly guaranteed (PPG) | 25.6 | 19.8 | 15.7 | 22.4 | 30.7 | 36.4 | 40.4 | 40.2 | 39.5 | 37.6 | 24.0 | ||||||||
| Change in external debt | 2.5 | -2.0 | -6.8 | 12.2 | 12.9 | 6.6 | 3.6 | -0.5 | -1.2 | -0.9 | -1.5 | ||||||||
| Identified net debt-creating flows | -2.1 | -9.3 | -10.7 | 13.9 | 8.2 | 7.4 | 4.6 | 2.7 | 2.0 | -0.1 | -2.7 | ||||||||
| Non-interest current account deficit | 10.3 | 15.5 | 16.6 | 6.0 | 6.6 | 7.5 | 9.8 | 11.1 | 10.1 | 9.3 | 8.7 | 7.0 | 5.2 | 6.6 | |||||
| Deficit in balance of goods and services | 47.1 | 52.5 | 53.0 | 33.0 | 39.0 | 40.3 | 39.8 | 39.6 | 39.4 | 36.7 | 32.7 | ||||||||
| Exports | 44.8 | 45.4 | 41.0 | 35.6 | 41.1 | 47.3 | 50.0 | 52.0 | 53.5 | 58.2 | 61.2 | ||||||||
| Imports | 91.9 | 97.9 | 94.0 | 68.5 | 80.1 | 87.7 | 89.8 | 91.6 | 92.9 | 94.9 | 93.9 | ||||||||
| Net current transfers (negative = inflow) | -39.1 | -40.0 | -38.4 | -29.9 | 8.5 | -27.2 | -32.3 | -32.2 | -32.7 | -33.3 | -33.7 | -31.9 | -28.6 | -30.9 | |||||
| o/w official | -1.9 | -1.7 | -2.0 | -1.5 | -3.1 | -2.4 | -1.8 | -1.6 | -1.5 | -1.5 | -1.5 | ||||||||
| Other current account flows (negative = net inflow) | 2.3 | 3.0 | 1.9 | 1.7 | 3.1 | 3.0 | 3.0 | 3.0 | 3.0 | 2.2 | 1.1 | ||||||||
| Net FDI (negative = inflow) | -6.9 | -11.9 | -11.4 | -6.5 | 3.4 | -1.7 | -3.9 | -4.8 | -5.1 | -5.8 | -6.3 | -7.5 | -8.8 | -7.9 | |||||
| Endogenous debt dynamics 2/ | -5.5 | -13.0 | -15.9 | 8.1 | 2.3 | 1.1 | -0.4 | -0.8 | -0.3 | 0.4 | 0.9 | ||||||||
| Contribution from nominal interest rate | 2.1 | 1.6 | 1.3 | 2.5 | 3.8 | 3.9 | 4.1 | 3.8 | 4.3 | 4.1 | 3.8 | ||||||||
| Contribution from real GDP growth | -2.6 | -1.5 | -3.6 | 5.7 | -1.5 | -2.7 | -4.5 | -4.7 | -4.6 | -3.7 | -2.8 | ||||||||
| Contribution from price and exchange rate changes | -5.1 | -13.1 | -13.6 | … | … | … | … | … | … | … | … | ||||||||
| Residual (3-4) 3/ | 4.7 | 7.3 | 3.9 | -1.7 | 4.7 | -0.8 | -1.0 | -3.1 | -3.2 | -0.8 | 1.2 | ||||||||
| o/w exceptional financing | -2.5 | -3.1 | -2.6 | -1.3 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
| PV of external debt 4/ | … | … | 55.1 | 67.4 | 78.2 | 83.9 | 86.9 | 86.5 | 85.6 | 82.0 | 64.9 | ||||||||
| In percent of exports | … | … | 134.3 | 189.3 | 190.2 | 177.3 | 173.8 | 166.6 | 160.0 | 140.9 | 106.0 | ||||||||
| PV of PPG external debt | … | … | 14.9 | 21.6 | 27.9 | 32.6 | 35.9 | 35.9 | 35.4 | 33.9 | 23.3 | ||||||||
| In percent of exports | … | … | 36.3 | 60.7 | 67.9 | 69.0 | 71.9 | 69.2 | 66.1 | 58.2 | 38.1 | ||||||||
| In percent of government revenues | … | … | 38.3 | 60.2 | 78.8 | 89.8 | 97.5 | 93.9 | 92.0 | 90.4 | 65.1 | ||||||||
| Debt service-to-exports ratio (in percent) | 15.1 | 13.7 | 16.6 | 19 | 20 | 17 | 18 | 17 | 19 | 23.7 | 22.9 | ||||||||
| PPG debt service-to-exports ratio (in percent) | 7.0 | 3.9 | 3.3 | 4.7 | 4.0 | 3.4 | 3.7 | 3.9 | 3.8 | 6.1 | 5.2 | ||||||||
| PPG debt service-to-revenue ratio (in percent) | 8.0 | 4.4 | 3.5 | 4.6 | 4.7 | 4.5 | 5.1 | 5.3 | 5.3 | 9.5 | 8.8 | ||||||||
| Total gross financing need (Millions of U.S. dollars) | 1118.9 | 1332.9 | 1865.3 | 2057.4 | 2100.1 | 2128.2 | 2180.6 | 2126.4 | 2215.0 | 2593.2 | 3179.9 | ||||||||
| Non-interest current account deficit that stabilizes debt ratio | 7.7 | 17.5 | 23.3 | -4.7 | -3.1 | 4.5 | 6.5 | 9.8 | 9.8 | 7.9 | 6.7 | ||||||||
| Key macroeconomic assumptions | |||||||||||||||||||
| Real GDP growth (in percent) | 4.8 | 3.0 | 7.8 | 5.0 | 3.6 | -9.0 | 2.1 | 3.6 | 5.5 | 5.5 | 5.5 | 2.2 | 4.5 | 4.5 | 4.5 | ||||
| GDP deflator in US dollar terms (change in percent) | 8.9 | 25.4 | 27.6 | 9.4 | 15.7 | -2.8 | -6.3 | 1.6 | 1.9 | 2.1 | 2.4 | -0.2 | 2.0 | 2.0 | 2.0 | ||||
| Effective interest rate (percent) 5/ | 3.9 | 3.2 | 2.8 | 4.1 | 0.8 | 3.9 | 5.3 | 5.0 | 5.0 | 4.5 | 5.1 | 4.8 | 5.0 | 6.0 | 5.4 | ||||
| Growth of exports of G&S (US dollar terms, in percent) | 1.5 | 30.9 | 24.3 | 13.2 | 15.7 | -23.2 | 10.5 | 21.1 | 13.7 | 12.0 | 11.2 | 7.5 | 8.4 | 7.1 | 7.6 | ||||
| Growth of imports of G&S (US dollar terms, in percent) | 15.3 | 37.5 | 32.1 | 18.7 | 20.9 | -35.5 | 11.8 | 15.1 | 10.2 | 9.9 | 9.6 | 3.5 | 7.0 | 6.4 | 6.7 | ||||
| Grant element of new public sector borrowing (in percent) | … | … | … | … | … | -1.1 | 23.1 | 18.1 | 18.1 | 18.0 | 19.2 | 15.9 | 10.4 | -3.3 | 6.0 | ||||
| Government revenues (excluding grants, in percent of GDP) | 39.2 | 39.9 | 38.9 | 35.9 | 35.4 | 36.3 | 36.9 | 38.3 | 38.5 | 37.5 | 35.8 | 37.0 | |||||||
| Aid flows (in Millions of US dollars) 7/ | 46.6 | 126.1 | 127.0 | 123.4 | 249.4 | 190.9 | 162.8 | 162.8 | 162.8 | 188.0 | 254.0 | ||||||||
| o/w Grants | 24.0 | 79.9 | 102.8 | 99.7 | 161.4 | 130.9 | 102.8 | 102.8 | 102.8 | 138.0 | 249.0 | ||||||||
| o/w Concessional loans | 22.6 | 46.2 | 24.2 | 23.7 | 88.0 | 60.0 | 60.0 | 60.0 | 60.0 | 50.0 | 5.0 | ||||||||
| Grant-equivalent financing (in percent of GDP) 8/ | … | … | … | 1.8 | 5.5 | 3.9 | 3.1 | 2.4 | 2.2 | 2.0 | 1.3 | 1.7 | |||||||
| Grant-equivalent financing (in percent of external financing) 8/ | … | … | … | 33.1 | 41.4 | 36.7 | 33.8 | 41.0 | 43.9 | 32.0 | 31.2 | 35.4 | |||||||
| Memorandum items: | |||||||||||||||||||
| Nominal GDP (Millions of US dollars) | 3408.4 | 4401.1 | 6054.8 | 5359.0 | 5124.3 | 5390.6 | 5799.0 | 6248.3 | 6749.8 | 9287.0 | 17580.9 | ||||||||
| Nominal dollar GDP growth | 14.1 | 29.1 | 37.6 | -11.5 | -4.4 | 5.2 | 7.6 | 7.7 | 8.0 | 2.1 | 6.6 | 6.6 | 6.6 | ||||||
| PV of PPG external debt (in Millions of US dollars) | 900.8 | 1044.9 | 1399.6 | 1732.3 | 2048.4 | 2221.3 | 2362.1 | 3115.2 | 4051.6 | ||||||||||
| (PVt-PVt-1)/GDPt-1 (in percent) | 2.4 | 6.6 | 6.5 | 5.9 | 3.0 | 2.3 | 4.4 | 2.0 | 0.7 | 1.1 | |||||||||
Includes both public and private sector external debt.
Derived as [r - g - ρ(1+g)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = 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.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
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).
oldova: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt with Additional Non-Concessional Borrowing, and Positive Impact on Growth, 2009-2029 1/
(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.
oldova: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt with Additional Non-Concessional Borrowing, and Positive Impact on Growth, 2009-2029 1/
(In percent)
| Projections | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2029 | |
| PV of debt-to GDP ratio | ||||||||||||
| Baseline | 22 | 28 | 33 | 36 | 36 | 35 | 35 | 34 | 34 | 34 | 34 | 23 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 22 | 16 | 13 | 10 | 6 | 3 | 1 | 0 | 0 | 0 | 1 | 9 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 22 | 32 | 38 | 42 | 43 | 43 | 43 | 43 | 44 | 44 | 45 | 37 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 22 | 26 | 30 | 32 | 32 | 30 | 29 | 28 | 27 | 27 | 27 | 17 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 22 | 30 | 47 | 48 | 47 | 45 | 43 | 41 | 39 | 37 | 35 | 18 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 22 | 26 | 32 | 34 | 34 | 32 | 31 | 30 | 29 | 28 | 28 | 18 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 22 | 37 | 52 | 54 | 52 | 50 | 47 | 44 | 42 | 40 | 38 | 18 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 22 | 28 | 41 | 43 | 42 | 40 | 38 | 36 | 34 | 33 | 31 | 16 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 22 | 38 | 43 | 47 | 46 | 44 | 42 | 40 | 39 | 39 | 38 | 25 |
| PV o f debt-to-exports ratio | ||||||||||||
| Baseline | 61 | 68 | 69 | 72 | 69 | 66 | 64 | 62 | 61 | 60 | 58 | 38 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 61 | 40 | 27 | 20 | 12 | 6 | 3 | 0 | 0 | 0 | 2 | 15 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 61 | 77 | 80 | 84 | 82 | 80 | 79 | 78 | 78 | 77 | 77 | 60 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 61 | 63 | 62 | 63 | 60 | 55 | 52 | 49 | 47 | 46 | 45 | 28 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 61 | 84 | 140 | 136 | 128 | 119 | 112 | 103 | 97 | 91 | 86 | 42 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 61 | 63 | 62 | 63 | 60 | 55 | 52 | 49 | 47 | 46 | 45 | 28 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 61 | 90 | 110 | 107 | 100 | 94 | 87 | 80 | 75 | 70 | 65 | 30 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 61 | 77 | 115 | 113 | 106 | 98 | 92 | 85 | 80 | 76 | 71 | 35 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 61 | 63 | 62 | 63 | 60 | 55 | 52 | 49 | 47 | 46 | 45 | 28 |
| PV of debt-to-revenue ratio | ||||||||||||
| Baseline | 60 | 79 | 90 | 98 | 94 | 92 | 91 | 90 | 90 | 90 | 90 | 65 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 60 | 46 | 35 | 27 | 17 | 9 | 4 | 0 | 0 | 1 | 3 | 25 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 60 | 90 | 104 | 114 | 112 | 111 | 112 | 113 | 115 | 117 | 119 | 103 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 60 | 73 | 83 | 88 | 83 | 79 | 76 | 74 | 72 | 72 | 71 | 49 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 60 | 86 | 129 | 131 | 123 | 118 | 113 | 107 | 102 | 98 | 94 | 51 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 60 | 73 | 88 | 93 | 88 | 84 | 80 | 78 | 76 | 76 | 75 | 51 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 60 | 104 | 144 | 145 | 136 | 130 | 124 | 117 | 111 | 106 | 101 | 51 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 60 | 78 | 114 | 116 | 109 | 104 | 100 | 94 | 90 | 87 | 84 | 46 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 60 | 107 | 119 | 126 | 119 | 113 | 109 | 105 | 104 | 103 | 102 | 69 |
| Debt service-to-exports ratio | ||||||||||||
| Baseline | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 6 | 6 | 6 | 5 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 5 | 3 | 2 | 2 | 2 | 1 | 1 | 1 | 1 | 1 | 0 | 1 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 5 | 4 | 4 | 5 | 5 | 5 | 5 | 7 | 7 | 6 | 6 | 7 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 5 | 5 | 5 | 4 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 5 | 5 | 5 | 7 | 7 | 6 | 7 | 11 | 11 | 11 | 10 | 6 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 5 | 5 | 5 | 4 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 5 | 4 | 4 | 5 | 5 | 5 | 6 | 8 | 9 | 8 | 8 | 4 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 5 | 4 | 4 | 6 | 6 | 5 | 6 | 9 | 9 | 9 | 9 | 5 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 5 | 5 | 5 | 4 |
| Debt service-to-revenue ratio | ||||||||||||
| Baseline | 5 | 5 | 4 | 5 | 5 | 5 | 6 | 8 | 9 | 9 | 9 | 9 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 5 | 4 | 3 | 3 | 2 | 2 | 1 | 1 | 1 | 1 | 1 | 1 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 5 | 5 | 5 | 6 | 7 | 6 | 7 | 10 | 10 | 9 | 10 | 13 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 5 | 5 | 4 | 5 | 5 | 5 | 5 | 7 | 8 | 8 | 8 | 7 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 5 | 5 | 5 | 6 | 6 | 6 | 7 | 11 | 11 | 12 | 11 | 7 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 5 | 5 | 5 | 5 | 5 | 5 | 6 | 7 | 8 | 9 | 9 | 7 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 5 | 5 | 5 | 7 | 7 | 7 | 9 | 12 | 13 | 13 | 13 | 8 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 5 | 4 | 4 | 6 | 6 | 6 | 7 | 10 | 10 | 10 | 10 | 7 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 5 | 7 | 6 | 7 | 7 | 7 | 8 | 10 | 11 | 12 | 12 | 10 |
| Memorandum item: | ||||||||||||
| Grant element assumed on residual financing (i.e., financing required above baseline) 6/ | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 |
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.
oldova: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt with Additional Non-Concessional Borrowing, and Positive Impact on Growth, 2009-2029 1/
(In percent)
| Projections | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2029 | |
| PV of debt-to GDP ratio | ||||||||||||
| Baseline | 22 | 28 | 33 | 36 | 36 | 35 | 35 | 34 | 34 | 34 | 34 | 23 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 22 | 16 | 13 | 10 | 6 | 3 | 1 | 0 | 0 | 0 | 1 | 9 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 22 | 32 | 38 | 42 | 43 | 43 | 43 | 43 | 44 | 44 | 45 | 37 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 22 | 26 | 30 | 32 | 32 | 30 | 29 | 28 | 27 | 27 | 27 | 17 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 22 | 30 | 47 | 48 | 47 | 45 | 43 | 41 | 39 | 37 | 35 | 18 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 22 | 26 | 32 | 34 | 34 | 32 | 31 | 30 | 29 | 28 | 28 | 18 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 22 | 37 | 52 | 54 | 52 | 50 | 47 | 44 | 42 | 40 | 38 | 18 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 22 | 28 | 41 | 43 | 42 | 40 | 38 | 36 | 34 | 33 | 31 | 16 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 22 | 38 | 43 | 47 | 46 | 44 | 42 | 40 | 39 | 39 | 38 | 25 |
| PV o f debt-to-exports ratio | ||||||||||||
| Baseline | 61 | 68 | 69 | 72 | 69 | 66 | 64 | 62 | 61 | 60 | 58 | 38 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 61 | 40 | 27 | 20 | 12 | 6 | 3 | 0 | 0 | 0 | 2 | 15 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 61 | 77 | 80 | 84 | 82 | 80 | 79 | 78 | 78 | 77 | 77 | 60 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 61 | 63 | 62 | 63 | 60 | 55 | 52 | 49 | 47 | 46 | 45 | 28 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 61 | 84 | 140 | 136 | 128 | 119 | 112 | 103 | 97 | 91 | 86 | 42 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 61 | 63 | 62 | 63 | 60 | 55 | 52 | 49 | 47 | 46 | 45 | 28 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 61 | 90 | 110 | 107 | 100 | 94 | 87 | 80 | 75 | 70 | 65 | 30 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 61 | 77 | 115 | 113 | 106 | 98 | 92 | 85 | 80 | 76 | 71 | 35 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 61 | 63 | 62 | 63 | 60 | 55 | 52 | 49 | 47 | 46 | 45 | 28 |
| PV of debt-to-revenue ratio | ||||||||||||
| Baseline | 60 | 79 | 90 | 98 | 94 | 92 | 91 | 90 | 90 | 90 | 90 | 65 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 60 | 46 | 35 | 27 | 17 | 9 | 4 | 0 | 0 | 1 | 3 | 25 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 60 | 90 | 104 | 114 | 112 | 111 | 112 | 113 | 115 | 117 | 119 | 103 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 60 | 73 | 83 | 88 | 83 | 79 | 76 | 74 | 72 | 72 | 71 | 49 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 60 | 86 | 129 | 131 | 123 | 118 | 113 | 107 | 102 | 98 | 94 | 51 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 60 | 73 | 88 | 93 | 88 | 84 | 80 | 78 | 76 | 76 | 75 | 51 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 60 | 104 | 144 | 145 | 136 | 130 | 124 | 117 | 111 | 106 | 101 | 51 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 60 | 78 | 114 | 116 | 109 | 104 | 100 | 94 | 90 | 87 | 84 | 46 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 60 | 107 | 119 | 126 | 119 | 113 | 109 | 105 | 104 | 103 | 102 | 69 |
| Debt service-to-exports ratio | ||||||||||||
| Baseline | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 6 | 6 | 6 | 5 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 5 | 3 | 2 | 2 | 2 | 1 | 1 | 1 | 1 | 1 | 0 | 1 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 5 | 4 | 4 | 5 | 5 | 5 | 5 | 7 | 7 | 6 | 6 | 7 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 5 | 5 | 5 | 4 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 5 | 5 | 5 | 7 | 7 | 6 | 7 | 11 | 11 | 11 | 10 | 6 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 5 | 5 | 5 | 4 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 5 | 4 | 4 | 5 | 5 | 5 | 6 | 8 | 9 | 8 | 8 | 4 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 5 | 4 | 4 | 6 | 6 | 5 | 6 | 9 | 9 | 9 | 9 | 5 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 5 | 5 | 5 | 4 |
| Debt service-to-revenue ratio | ||||||||||||
| Baseline | 5 | 5 | 4 | 5 | 5 | 5 | 6 | 8 | 9 | 9 | 9 | 9 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 5 | 4 | 3 | 3 | 2 | 2 | 1 | 1 | 1 | 1 | 1 | 1 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 5 | 5 | 5 | 6 | 7 | 6 | 7 | 10 | 10 | 9 | 10 | 13 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 5 | 5 | 4 | 5 | 5 | 5 | 5 | 7 | 8 | 8 | 8 | 7 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 5 | 5 | 5 | 6 | 6 | 6 | 7 | 11 | 11 | 12 | 11 | 7 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 5 | 5 | 5 | 5 | 5 | 5 | 6 | 7 | 8 | 9 | 9 | 7 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 5 | 5 | 5 | 7 | 7 | 7 | 9 | 12 | 13 | 13 | 13 | 8 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 5 | 4 | 4 | 6 | 6 | 6 | 7 | 10 | 10 | 10 | 10 | 7 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 5 | 7 | 6 | 7 | 7 | 7 | 8 | 10 | 11 | 12 | 12 | 10 |
| Memorandum item: | ||||||||||||
| Grant element assumed on residual financing (i.e., financing required above baseline) 6/ | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 |
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.
Moldova: Public Sector Debt Sustainability Framework, Baseline Scenario with Additional Non-Concessional Borrowing, and Positive Impact on Growth, 2009-2029 1/
(In percent of GDP, unless otherwise indicated)
General government gross debt, excluding 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.
Moldova: Public Sector Debt Sustainability Framework, Baseline Scenario with Additional Non-Concessional Borrowing, and Positive Impact on Growth, 2009-2029 1/
(In percent of GDP, unless otherwise indicated)
| Actual | Average | Standard Deviation | Estimate | Projections | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2009-14 Average | 2019 | 2029 | 2015-29 Average | ||||||
| Public sector debt 1/ | 34.0 | 26.8 | 21.3 | 30.9 | 38.9 | 43.7 | 46.7 | 45.8 | 44.3 | 41.4 | 26.2 | |||||||
| o/w foreign-currency denominated | 25.6 | 19.8 | 15.7 | 22.4 | 30.7 | 36.4 | 40.4 | 40.2 | 39.5 | 37.6 | 24.0 | |||||||
| Change in public sector debt | -3.6 | -7.2 | -5.5 | 9.6 | 8.0 | 4.7 | 3.0 | -0.9 | -1.5 | -0.5 | -1.2 | |||||||
| Identified debt-creating flows | -6.0 | -8.5 | -6.3 | 12.9 | 4.9 | 2.0 | -0.8 | -3.0 | -2.7 | -1.8 | -0.9 | |||||||
| Primary deficit | -1.3 | -1.0 | -0.2 | -2.0 | 3.5 | 7.5 | 5.5 | 3.5 | 1.5 | 0.1 | -0.4 | 2.9 | -0.5 | -0.3 | -0.4 | |||
| Revenue and grants | 39.9 | 41.7 | 40.6 | 37.8 | 38.6 | 38.8 | 38.6 | 39.9 | 40.0 | 39.0 | 37.2 | |||||||
| of which: grants | 0.7 | 1.8 | 1.7 | 1.9 | 3.1 | 2.4 | 1.8 | 1.6 | 1.5 | 1.5 | 1.4 | |||||||
| Primary (noninterest) expenditure | 38.6 | 40.8 | 40.4 | 45.3 | 44.0 | 42.2 | 40.2 | 40.0 | 39.6 | 38.5 | 36.8 | |||||||
| Automatic debt dynamics | -4.3 | -7.3 | -4.2 | 5.8 | 0.0 | -0.9 | -1.7 | -2.4 | -2.2 | -1.4 | -0.6 | |||||||
| Contribution from interest rate/growth differential | -3.7 | -6.0 | -5.3 | 3.9 | 1.9 | -0.7 | -1.8 | -2.1 | -2.2 | -1.4 | -0.6 | |||||||
| of which: contribution from average real interest rate | -2.0 | -5.0 | -3.4 | 1.7 | 2.5 | 0.7 | 0.5 | 0.3 | 0.2 | 0.5 | 0.6 | |||||||
| of which: contribution from real GDP growth | -1.7 | -1.0 | -1.9 | 2.1 | -0.6 | -1.3 | -2.3 | -2.4 | -2.4 | -1.8 | -1.2 | |||||||
| Contribution from real exchange rate depreciation | -0.6 | -1.3 | 1.1 | 2.0 | -1.9 | -0.2 | 0.1 | -0.3 | 0.0 | … | … | |||||||
| Other identified debt-creating flows | -0.4 | -0.3 | -1.9 | -0.4 | -0.6 | -0.6 | -0.6 | -0.7 | -0.1 | 0.0 | 0.0 | |||||||
| Privatization receipts (negative) | -0.4 | -0.3 | -1.9 | -0.4 | -0.6 | -0.6 | -0.6 | -0.7 | -0.1 | 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 | |||||||
| 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 | |||||||
| 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 | |||||||
| Residual, including asset changes | 2.3 | 1.3 | 0.8 | -3.3 | 3.1 | 2.7 | 3.8 | 2.0 | 1.3 | 1.3 | -0.2 | |||||||
| Other Sustainability Indicators | ||||||||||||||||||
| PV of public sector debt | 8.5 | 7.0 | 20.5 | 30.2 | 36.1 | 39.9 | 42.3 | 41.5 | 40.2 | 37.7 | 25.5 | |||||||
| o/w foreign-currency denominated | 0.0 | 0.0 | 14.9 | 21.6 | 27.9 | 32.6 | 35.9 | 35.9 | 35.4 | 33.9 | 23.3 | |||||||
| o/w external | … | … | 14.9 | 21.6 | 27.9 | 32.6 | 35.9 | 35.9 | 35.4 | 33.9 | 23.3 | |||||||
| PV of contingent liabilities (not included in public sector debt) | … | … | … | … | … | … | … | … | … | … | … | |||||||
| Gross financing need 2/ | 6.9 | 4.8 | 4.9 | 12.9 | 15.1 | 13.1 | 10.6 | 8.5 | 7.2 | 7.2 | 5.3 | |||||||
| PV of public sector debt-to-revenue and grants ratio (in percent) | 21.2 | 16.8 | 50.4 | 79.9 | 93.6 | 103.0 | 109.4 | 103.8 | 100.5 | 96.7 | 68.6 | |||||||
| PV of public sector debt-to-revenue ratio (in percent) | 21.6 | 17.6 | 52.7 | 84.1 | 101.9 | 109.8 | 114.7 | 108.3 | 104.5 | 100.5 | 71.3 | |||||||
| o/w external 3/ | … | … | 38.3 | 60.2 | 78.8 | 89.8 | 97.5 | 93.9 | 92.0 | 90.4 | 65.1 | |||||||
| Debt service-to-revenue and grants ratio (in percent) 4/ | 9.2 | 6.9 | 6.0 | 7.2 | 6.8 | 7.1 | 7.3 | 7.1 | 6.9 | 10.6 | 9.5 | |||||||
| Debt service-to-revenue ratio (in percent) 4/ | 9.3 | 7.2 | 6.3 | 7.6 | 7.4 | 7.6 | 7.6 | 7.4 | 7.1 | 11.0 | 9.9 | |||||||
| Primary deficit that stabilizes the debt-to-GDP ratio | 2.3 | 6.2 | 5.3 | -2.1 | -2.5 | -1.3 | -1.5 | 1.0 | 1.0 | 0.1 | 0.9 | |||||||
| Key macroeconomic and fiscal assumptions | ||||||||||||||||||
| Real GDP growth (in percent) | 4.8 | 3.0 | 7.8 | 5.0 | 3.6 | -9.0 | 2.1 | 3.6 | 5.5 | 5.5 | 5.5 | 2.2 | 4.5 | 4.5 | 4.5 | |||
| Average nominal interest rate on forex debt (in percent) | 3.3 | 1.9 | 1.8 | 3.3 | 1.1 | 2.3 | 2.5 | 2.2 | 2.2 | 2.1 | 2.1 | 2.2 | 2.5 | 3.5 | 2.8 | |||
| Average real interest rate on domestic debt (in percent) | -6.6 | -3.8 | 5.4 | -0.5 | 4.8 | 13.8 | 5.5 | 6.1 | 5.5 | 5.5 | 5.8 | 7.0 | 7.6 | 10.0 | 8.3 | |||
| Real exchange rate depreciation (in percent, + indicates depreciation) | -2.4 | -6.5 | 7.6 | -3.7 | 10.5 | 10.8 | … | … | … | … | … | … | … | … | … | |||
| Inflation rate (GDP deflator, in percent) | 13.4 | 15.9 | 9.2 | 16.0 | 10.1 | 3.9 | 6.5 | 4.7 | 4.7 | 4.3 | 4.0 | 4.7 | 4.0 | 4.0 | 4.0 | |||
| Growth of real primary spending (deflated by GDP deflator, in percent) | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| Grant element of new external borrowing (in percent) | … | … | … | … | … | -1.1 | 23.1 | 18.1 | 18.1 | 18.0 | 19.2 | 15.9 | 10.4 | -3.3 | … | |||
General government gross debt, excluding 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.
Moldova: Public Sector Debt Sustainability Framework, Baseline Scenario with Additional Non-Concessional Borrowing, and Positive Impact on Growth, 2009-2029 1/
(In percent of GDP, unless otherwise indicated)
| Actual | Average | Standard Deviation | Estimate | Projections | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2009-14 Average | 2019 | 2029 | 2015-29 Average | ||||||
| Public sector debt 1/ | 34.0 | 26.8 | 21.3 | 30.9 | 38.9 | 43.7 | 46.7 | 45.8 | 44.3 | 41.4 | 26.2 | |||||||
| o/w foreign-currency denominated | 25.6 | 19.8 | 15.7 | 22.4 | 30.7 | 36.4 | 40.4 | 40.2 | 39.5 | 37.6 | 24.0 | |||||||
| Change in public sector debt | -3.6 | -7.2 | -5.5 | 9.6 | 8.0 | 4.7 | 3.0 | -0.9 | -1.5 | -0.5 | -1.2 | |||||||
| Identified debt-creating flows | -6.0 | -8.5 | -6.3 | 12.9 | 4.9 | 2.0 | -0.8 | -3.0 | -2.7 | -1.8 | -0.9 | |||||||
| Primary deficit | -1.3 | -1.0 | -0.2 | -2.0 | 3.5 | 7.5 | 5.5 | 3.5 | 1.5 | 0.1 | -0.4 | 2.9 | -0.5 | -0.3 | -0.4 | |||
| Revenue and grants | 39.9 | 41.7 | 40.6 | 37.8 | 38.6 | 38.8 | 38.6 | 39.9 | 40.0 | 39.0 | 37.2 | |||||||
| of which: grants | 0.7 | 1.8 | 1.7 | 1.9 | 3.1 | 2.4 | 1.8 | 1.6 | 1.5 | 1.5 | 1.4 | |||||||
| Primary (noninterest) expenditure | 38.6 | 40.8 | 40.4 | 45.3 | 44.0 | 42.2 | 40.2 | 40.0 | 39.6 | 38.5 | 36.8 | |||||||
| Automatic debt dynamics | -4.3 | -7.3 | -4.2 | 5.8 | 0.0 | -0.9 | -1.7 | -2.4 | -2.2 | -1.4 | -0.6 | |||||||
| Contribution from interest rate/growth differential | -3.7 | -6.0 | -5.3 | 3.9 | 1.9 | -0.7 | -1.8 | -2.1 | -2.2 | -1.4 | -0.6 | |||||||
| of which: contribution from average real interest rate | -2.0 | -5.0 | -3.4 | 1.7 | 2.5 | 0.7 | 0.5 | 0.3 | 0.2 | 0.5 | 0.6 | |||||||
| of which: contribution from real GDP growth | -1.7 | -1.0 | -1.9 | 2.1 | -0.6 | -1.3 | -2.3 | -2.4 | -2.4 | -1.8 | -1.2 | |||||||
| Contribution from real exchange rate depreciation | -0.6 | -1.3 | 1.1 | 2.0 | -1.9 | -0.2 | 0.1 | -0.3 | 0.0 | … | … | |||||||
| Other identified debt-creating flows | -0.4 | -0.3 | -1.9 | -0.4 | -0.6 | -0.6 | -0.6 | -0.7 | -0.1 | 0.0 | 0.0 | |||||||
| Privatization receipts (negative) | -0.4 | -0.3 | -1.9 | -0.4 | -0.6 | -0.6 | -0.6 | -0.7 | -0.1 | 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 | |||||||
| 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 | |||||||
| 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 | |||||||
| Residual, including asset changes | 2.3 | 1.3 | 0.8 | -3.3 | 3.1 | 2.7 | 3.8 | 2.0 | 1.3 | 1.3 | -0.2 | |||||||
| Other Sustainability Indicators | ||||||||||||||||||
| PV of public sector debt | 8.5 | 7.0 | 20.5 | 30.2 | 36.1 | 39.9 | 42.3 | 41.5 | 40.2 | 37.7 | 25.5 | |||||||
| o/w foreign-currency denominated | 0.0 | 0.0 | 14.9 | 21.6 | 27.9 | 32.6 | 35.9 | 35.9 | 35.4 | 33.9 | 23.3 | |||||||
| o/w external | … | … | 14.9 | 21.6 | 27.9 | 32.6 | 35.9 | 35.9 | 35.4 | 33.9 | 23.3 | |||||||
| PV of contingent liabilities (not included in public sector debt) | … | … | … | … | … | … | … | … | … | … | … | |||||||
| Gross financing need 2/ | 6.9 | 4.8 | 4.9 | 12.9 | 15.1 | 13.1 | 10.6 | 8.5 | 7.2 | 7.2 | 5.3 | |||||||
| PV of public sector debt-to-revenue and grants ratio (in percent) | 21.2 | 16.8 | 50.4 | 79.9 | 93.6 | 103.0 | 109.4 | 103.8 | 100.5 | 96.7 | 68.6 | |||||||
| PV of public sector debt-to-revenue ratio (in percent) | 21.6 | 17.6 | 52.7 | 84.1 | 101.9 | 109.8 | 114.7 | 108.3 | 104.5 | 100.5 | 71.3 | |||||||
| o/w external 3/ | … | … | 38.3 | 60.2 | 78.8 | 89.8 | 97.5 | 93.9 | 92.0 | 90.4 | 65.1 | |||||||
| Debt service-to-revenue and grants ratio (in percent) 4/ | 9.2 | 6.9 | 6.0 | 7.2 | 6.8 | 7.1 | 7.3 | 7.1 | 6.9 | 10.6 | 9.5 | |||||||
| Debt service-to-revenue ratio (in percent) 4/ | 9.3 | 7.2 | 6.3 | 7.6 | 7.4 | 7.6 | 7.6 | 7.4 | 7.1 | 11.0 | 9.9 | |||||||
| Primary deficit that stabilizes the debt-to-GDP ratio | 2.3 | 6.2 | 5.3 | -2.1 | -2.5 | -1.3 | -1.5 | 1.0 | 1.0 | 0.1 | 0.9 | |||||||
| Key macroeconomic and fiscal assumptions | ||||||||||||||||||
| Real GDP growth (in percent) | 4.8 | 3.0 | 7.8 | 5.0 | 3.6 | -9.0 | 2.1 | 3.6 | 5.5 | 5.5 | 5.5 | 2.2 | 4.5 | 4.5 | 4.5 | |||
| Average nominal interest rate on forex debt (in percent) | 3.3 | 1.9 | 1.8 | 3.3 | 1.1 | 2.3 | 2.5 | 2.2 | 2.2 | 2.1 | 2.1 | 2.2 | 2.5 | 3.5 | 2.8 | |||
| Average real interest rate on domestic debt (in percent) | -6.6 | -3.8 | 5.4 | -0.5 | 4.8 | 13.8 | 5.5 | 6.1 | 5.5 | 5.5 | 5.8 | 7.0 | 7.6 | 10.0 | 8.3 | |||
| Real exchange rate depreciation (in percent, + indicates depreciation) | -2.4 | -6.5 | 7.6 | -3.7 | 10.5 | 10.8 | … | … | … | … | … | … | … | … | … | |||
| Inflation rate (GDP deflator, in percent) | 13.4 | 15.9 | 9.2 | 16.0 | 10.1 | 3.9 | 6.5 | 4.7 | 4.7 | 4.3 | 4.0 | 4.7 | 4.0 | 4.0 | 4.0 | |||
| Growth of real primary spending (deflated by GDP deflator, in percent) | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| Grant element of new external borrowing (in percent) | … | … | … | … | … | -1.1 | 23.1 | 18.1 | 18.1 | 18.0 | 19.2 | 15.9 | 10.4 | -3.3 | … | |||
General government gross debt, excluding 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.
Moldova: Sensitivity Analysis for Key Indicators of Public Debt 2009-2029
Assumes that real GDP growth is at baseline minus one standard deviation divided by the square root of the length of the projection period.
Revenues are defined inclusive of grants.
Moldova: Sensitivity Analysis for Key Indicators of Public Debt 2009-2029
| Projections | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2019 | 2029 | |
| PV of Debt-to-GDP Ratio | ||||||||
| Baseline | 30 | 36 | 40 | 42 | 41 | 40 | 38 | 26 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 30 | 28 | 26 | 25 | 23 | 21 | 13 | 0 |
| A2. Primary balance is unchanged from 2009 | 30 | 38 | 46 | 54 | 60 | 66 | 99 | 145 |
| A3. Permanently lower GDP growth 1/ | 30 | 37 | 41 | 45 | 45 | 46 | 56 | 84 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 30 | 37 | 42 | 46 | 46 | 46 | 48 | 42 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 30 | 32 | 34 | 37 | 36 | 35 | 33 | 22 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 30 | 30 | 30 | 33 | 32 | 31 | 28 | 16 |
| B4. One-time 30 percent real depreciation in 2010 | 30 | 45 | 48 | 50 | 49 | 48 | 47 | 41 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 30 | 46 | 50 | 52 | 51 | 49 | 46 | 32 |
| PV of Debt-to-Revenue Ratio 2/ | ||||||||
| Baseline | 80 | 94 | 103 | 109 | 104 | 101 | 97 | 69 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 80 | 72 | 67 | 65 | 58 | 53 | 33 | 0 |
| A2. Primary balance is unchanged from 2009 | 80 | 99 | 119 | 140 | 151 | 166 | 254 | 391 |
| A3. Permanently lower GDP growth 1/ | 80 | 95 | 107 | 116 | 114 | 115 | 143 | 226 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 80 | 95 | 109 | 118 | 115 | 114 | 122 | 114 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 80 | 83 | 88 | 95 | 90 | 87 | 85 | 59 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 80 | 78 | 78 | 85 | 80 | 77 | 72 | 42 |
| B4. One-time 30 percent real depreciation in 2010 | 80 | 117 | 125 | 130 | 124 | 120 | 120 | 110 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 80 | 120 | 128 | 134 | 127 | 123 | 117 | 85 |
| Debt Service-to-Revenue Ratio 2/ | ||||||||
| Baseline | 7 | 7 | 7 | 7 | 7 | 7 | 11 | 10 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 7 | 7 | 6 | 5 | 5 | 5 | 5 | 1 |
| A2. Primary balance is unchanged from 2009 | 7 | 7 | 7 | 8 | 9 | 9 | 20 | 38 |
| A3. Permanently lower GDP growth 1/ | 7 | 7 | 7 | 8 | 7 | 7 | 13 | 22 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 7 | 7 | 7 | 8 | 8 | 7 | 12 | 14 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 7 | 7 | 7 | 6 | 6 | 6 | 9 | 8 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 7 | 7 | 6 | 6 | 6 | 6 | 8 | 7 |
| B4. One-time 30 percent real depreciation in 2010 | 7 | 8 | 9 | 10 | 10 | 10 | 16 | 19 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 7 | 7 | 8 | 9 | 8 | 8 | 13 | 11 |
Assumes that real GDP growth is at baseline minus one standard deviation divided by the square root of the length of the projection period.
Revenues are defined inclusive of grants.
Moldova: Sensitivity Analysis for Key Indicators of Public Debt 2009-2029
| Projections | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2019 | 2029 | |
| PV of Debt-to-GDP Ratio | ||||||||
| Baseline | 30 | 36 | 40 | 42 | 41 | 40 | 38 | 26 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 30 | 28 | 26 | 25 | 23 | 21 | 13 | 0 |
| A2. Primary balance is unchanged from 2009 | 30 | 38 | 46 | 54 | 60 | 66 | 99 | 145 |
| A3. Permanently lower GDP growth 1/ | 30 | 37 | 41 | 45 | 45 | 46 | 56 | 84 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 30 | 37 | 42 | 46 | 46 | 46 | 48 | 42 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 30 | 32 | 34 | 37 | 36 | 35 | 33 | 22 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 30 | 30 | 30 | 33 | 32 | 31 | 28 | 16 |
| B4. One-time 30 percent real depreciation in 2010 | 30 | 45 | 48 | 50 | 49 | 48 | 47 | 41 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 30 | 46 | 50 | 52 | 51 | 49 | 46 | 32 |
| PV of Debt-to-Revenue Ratio 2/ | ||||||||
| Baseline | 80 | 94 | 103 | 109 | 104 | 101 | 97 | 69 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 80 | 72 | 67 | 65 | 58 | 53 | 33 | 0 |
| A2. Primary balance is unchanged from 2009 | 80 | 99 | 119 | 140 | 151 | 166 | 254 | 391 |
| A3. Permanently lower GDP growth 1/ | 80 | 95 | 107 | 116 | 114 | 115 | 143 | 226 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 80 | 95 | 109 | 118 | 115 | 114 | 122 | 114 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 80 | 83 | 88 | 95 | 90 | 87 | 85 | 59 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 80 | 78 | 78 | 85 | 80 | 77 | 72 | 42 |
| B4. One-time 30 percent real depreciation in 2010 | 80 | 117 | 125 | 130 | 124 | 120 | 120 | 110 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 80 | 120 | 128 | 134 | 127 | 123 | 117 | 85 |
| Debt Service-to-Revenue Ratio 2/ | ||||||||
| Baseline | 7 | 7 | 7 | 7 | 7 | 7 | 11 | 10 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 7 | 7 | 6 | 5 | 5 | 5 | 5 | 1 |
| A2. Primary balance is unchanged from 2009 | 7 | 7 | 7 | 8 | 9 | 9 | 20 | 38 |
| A3. Permanently lower GDP growth 1/ | 7 | 7 | 7 | 8 | 7 | 7 | 13 | 22 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 7 | 7 | 7 | 8 | 8 | 7 | 12 | 14 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 7 | 7 | 7 | 6 | 6 | 6 | 9 | 8 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 7 | 7 | 6 | 6 | 6 | 6 | 8 | 7 |
| B4. One-time 30 percent real depreciation in 2010 | 7 | 8 | 9 | 10 | 10 | 10 | 16 | 19 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 7 | 7 | 8 | 9 | 8 | 8 | 13 | 11 |
Assumes that real GDP growth is at baseline minus one standard deviation divided by the square root of the length of the projection period.
Revenues are defined inclusive of grants.
16. Under these assumptions, the external debt burden indicators generally remain under the indicative thresholds, although the PV of the debt-to-GDP ratio could breach its threshold under some stress tests, signaling increased vulnerabilities. Two tests, however, employ the unlikely assumptions that remittances would experience a further sharp drop in 2010–11 from their already depressed 2009 level. Two other tests are more realistic, assuming respectively that exports will take a long time to recover from the 2009 slump and a sharp real depreciation (30 percent), above levels observed in Moldova during the recent crisis, but comparable to the shocks in the late 1990s. The PV of the debt-to-GDP ratio also breaches the threshold if the financing terms of the new loans are much less favorable than assumed here. The probability of this scenario will strongly depend on the financing terms of the new non-concessional financing. If the authorities succeed in obtaining financing at fixed interest rate, the risk is less likely to materialize. On the other hand, floating interest rates linked to the international interest rates would significantly increase Moldova’s debt vulnerability. Overall, this scenario emphasizes the need to contract additional financing needed for development projects on fixed (preferably concessional) terms.
Scenario 2
17. The second (conservative) scenario assumes a similar schedule of borrowing as in Scenario 1, but no additional increase in growth and exports (Figure 5A–6A, Tables 9A–12A). Additional borrowing will thus only result in increased imports, a wider current account deficit, and higher debt burden in the long run. These conservative assumptions are motivated by instances of international experience with large infrastructure projects, where actual benefits turn out much lower than expected.
Moldova: Indicators of Public and Publicly Guaranteed External Debt with Additional Non-Concessional Financing and no Increase in Growth, 2009-2029 1/
Citation: IMF Staff Country Reports 2010, 032; 10.5089/9781451825190.002.A002
Sources: Country authorities; and staff estimates and projections.1/ The most extreme stress test is the test that yields the highest ratio in 2019. In figure b. it corresponds to a Terms shock; in c. to a Exports shock; in d. to a Terms shock; in e. to a Exports shock and in figure f. to a Non-debt flows shockMoldova: Indicators of Public Debt with Additional Non-Concessional Financing and no Increase in Growth, 2009-2029 1/
Citation: IMF Staff Country Reports 2010, 032; 10.5089/9781451825190.002.A002
Sources: Country authorities; and staff estimates and projections.1/ The most extreme stress test is the test that yields the highest ratio in 2019.2/ Revenues are defined inclusive of grants.Moldova: External Debt Sustainability Framework with Additional Non-Concessional Borrowing and no Impact on Growth, 2006-2029 1/
(In percent of GDP, unless otherwise indicated)
Includes both public and private sector external debt.
Derived as [r - g - ρ(1+g)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = 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.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
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).
Moldova: External Debt Sustainability Framework with Additional Non-Concessional Borrowing and no Impact on Growth, 2006-2029 1/
(In percent of GDP, unless otherwise indicated)
| Actual | Historical Average | Standard Deviation | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2009-2014 Average | 2019 | 2029 | 2015-2029 Average | |||||||
| External debt (nominal) 1/ | 64.7 | 62.7 | 55.9 | 68.1 | 81.5 | 88.7 | 92.8 | 92.8 | 92.0 | 87.8 | 69.5 | ||||||||
| o/w public and publicly guaranteed (PPG) | 25.6 | 19.8 | 15.7 | 22.4 | 30.9 | 36.8 | 41.0 | 41.1 | 40.5 | 37.3 | 25.9 | ||||||||
| Change in external debt | 2.5 | -2.0 | -6.8 | 12.2 | 13.4 | 7.2 | 4.1 | 0.0 | -0.8 | -1.6 | -1.4 | ||||||||
| Identified net debt-creating flows | -2.1 | -9.3 | -10.7 | 13.9 | 8.3 | 7.2 | 3.9 | 1.5 | 0.4 | 1.0 | 1.2 | ||||||||
| Non-interest current account deficit | 10.3 | 15.5 | 16.6 | 6.0 | 6.6 | 7.5 | 9.4 | 10.5 | 9.0 | 7.8 | 6.8 | 6.9 | 7.1 | 7.0 | |||||
| Deficit in balance of goods and services | 47.1 | 52.5 | 53.0 | 33.0 | 38.8 | 39.9 | 39.1 | 38.7 | 38.3 | 37.4 | 35.4 | ||||||||
| Exports | 44.8 | 45.4 | 41.0 | 35.6 | 41.0 | 47.2 | 49.8 | 51.7 | 53.0 | 55.5 | 58.4 | ||||||||
| Imports | 91.9 | 97.9 | 94.0 | 68.5 | 79.9 | 87.1 | 88.9 | 90.4 | 91.3 | 93.0 | 93.8 | ||||||||
| Net current transfers (negative = inflow) | -39.1 | -40.0 | -38.4 | -29.9 | 8.5 | -27.2 | -32.4 | -32.5 | -33.1 | -33.9 | -34.5 | -32.6 | -29.2 | -31.6 | |||||
| o/w official | -1.9 | -1.7 | -2.0 | -1.5 | -3.2 | -2.5 | -1.8 | -1.7 | -1.6 | -1.6 | -1.6 | ||||||||
| Other current account flows (negative = net inflow) | 2.3 | 3.0 | 1.9 | 1.7 | 3.1 | 3.1 | 3.1 | 3.0 | 3.0 | 2.2 | 0.9 | ||||||||
| Net FDI (negative = inflow) | -6.9 | -11.9 | -11.4 | -6.5 | 3.4 | -1.7 | -3.9 | -4.9 | -5.2 | -6.0 | -6.4 | -6.8 | -7.2 | -6.9 | |||||
| Endogenous debt dynamics 2/ | -5.5 | -13.0 | -15.9 | 8.1 | 2.7 | 1.6 | 0.0 | -0.4 | 0.1 | 0.9 | 1.3 | ||||||||
| Contribution from nominal interest rate | 2.1 | 1.6 | 1.3 | 2.5 | 3.8 | 3.9 | 4.2 | 3.9 | 4.4 | 4.2 | 3.9 | ||||||||
| Contribution from real GDP growth | -2.6 | -1.5 | -3.6 | 5.7 | -1.1 | -2.3 | -4.1 | -4.3 | -4.3 | -3.4 | -2.7 | ||||||||
| Contribution from price and exchange rate changes | -5.1 | -13.1 | -13.6 | … | … | … | … | … | … | … | … | ||||||||
| Residual (3-4) 3/ | 4.7 | 7.3 | 3.9 | -1.7 | 5.1 | 0.0 | 0.3 | -1.5 | -1.2 | -2.6 | -2.6 | ||||||||
| o/w exceptional financing | -2.5 | -3.1 | -2.6 | -1.3 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
| PV of external debt 4/ | … | … | 55.1 | 67.4 | 78.7 | 84.9 | 88.3 | 88.4 | 87.7 | 84.0 | 68.6 | ||||||||
| In percent of exports | … | … | 134.3 | 189.3 | 191.7 | 179.6 | 177.2 | 171.1 | 165.5 | 151.2 | 117.5 | ||||||||
| PV of PPG external debt | … | … | 14.9 | 21.6 | 28.1 | 33.0 | 36.5 | 36.7 | 36.3 | 33.5 | 25.1 | ||||||||
| In percent of exports | … | … | 36.3 | 60.7 | 68.4 | 69.8 | 73.3 | 71.0 | 68.4 | 60.3 | 42.9 | ||||||||
| In percent of government revenues | … | … | 38.3 | 60.2 | 78.2 | 89.8 | 97.5 | 93.9 | 92.0 | 85.1 | 63.6 | ||||||||
| Debt service-to-exports ratio (in percent) | 15.1 | 13.7 | 16.6 | 19 | 21 | 17 | 19 | 17 | 20 | 26.2 | 24.9 | ||||||||
| PPG debt service-to-exports ratio (in percent) | 7.0 | 3.9 | 3.3 | 4.7 | 4.1 | 3.5 | 3.8 | 4.0 | 3.9 | 6.7 | 5.5 | ||||||||
| PPG debt service-to-revenue ratio (in percent) | 8.0 | 4.4 | 3.5 | 4.6 | 4.6 | 4.5 | 5.1 | 5.3 | 5.3 | 9.4 | 8.2 | ||||||||
| Total gross financing need (Millions of U.S. dollars) | 1118.9 | 1332.9 | 1865.3 | 2057.4 | 2078.7 | 2086.2 | 2108.5 | 2022.9 | 2079.0 | 2659.3 | 3679.6 | ||||||||
| Non-interest current account deficit that stabilizes debt ratio | 7.7 | 17.5 | 23.3 | -4.7 | -3.9 | 3.3 | 4.9 | 7.9 | 7.6 | 8.5 | 8.5 | ||||||||
| Key macroeconomic assumptions | |||||||||||||||||||
| Real GDP growth (in percent) | 4.8 | 3.0 | 7.8 | 5.0 | 3.6 | -9.0 | 1.5 | 3.0 | 5.0 | 5.0 | 5.0 | 1.8 | 4.0 | 4.0 | 4.0 | ||||
| GDP deflator in US dollar terms (change in percent) | 8.9 | 25.4 | 27.6 | 9.4 | 15.7 | -2.8 | -6.3 | 1.6 | 1.9 | 2.1 | 2.4 | -0.2 | 2.0 | 2.0 | 2.0 | ||||
| Effective interest rate (percent) 5/ | 3.9 | 3.2 | 2.8 | 4.1 | 0.8 | 3.9 | 5.3 | 5.0 | 5.0 | 4.5 | 5.1 | 4.8 | 5.0 | 5.9 | 5.4 | ||||
| Growth of exports of G&S (US dollar terms, in percent) | 1.5 | 30.9 | 24.3 | 13.2 | 15.7 | -23.2 | 9.6 | 20.4 | 12.9 | 11.2 | 10.4 | 6.9 | 6.6 | 6.6 | 6.8 | ||||
| Growth of imports of G&S (US dollar terms, in percent) | 15.3 | 37.5 | 32.1 | 18.7 | 20.9 | -35.5 | 10.8 | 14.2 | 9.3 | 9.0 | 8.7 | 2.7 | 6.3 | 6.2 | 6.3 | ||||
| Grant element of new public sector borrowing (in percent) | … | … | … | … | … | -1.1 | 23.1 | 18.1 | 18.1 | 18.0 | 19.2 | 15.9 | 11.5 | -2.4 | 6.6 | ||||
| Government revenues (excluding grants, in percent of GDP) | 39.2 | 39.9 | 38.9 | 35.9 | 35.9 | 36.7 | 37.5 | 39.1 | 39.4 | 39.4 | 39.4 | 39.4 | |||||||
| Aid flows (in Millions of US dollars) 7/ | 46.6 | 126.1 | 127.0 | 123.4 | 249.4 | 191.0 | 162.8 | 162.8 | 162.8 | 188.0 | 254.1 | ||||||||
| o/w Grants | 24.0 | 79.9 | 102.8 | 99.7 | 161.4 | 131.0 | 102.8 | 102.8 | 102.8 | 138.0 | 249.1 | ||||||||
| o/w Concessional loans | 22.6 | 46.2 | 24.2 | 23.7 | 88.0 | 60.0 | 60.0 | 60.0 | 60.0 | 50.0 | 5.0 | ||||||||
| Grant-equivalent financing (in percent of GDP) 8/ | … | … | … | 1.8 | 5.5 | 4.0 | 3.2 | 2.5 | 2.2 | 2.0 | 1.5 | 1.8 | |||||||
| Grant-equivalent financing (in percent of external financing) 8/ | … | … | … | 33.1 | 41.4 | 36.7 | 33.8 | 41.0 | 43.9 | 35.8 | 32.2 | 36.6 | |||||||
| Memorandum items: | |||||||||||||||||||
| Nominal GDP (Millions of US dollars) | 3408.4 | 4401.1 | 6054.8 | 5359.0 | 5094.8 | 5330.4 | 5705.7 | 6119.2 | 6581.8 | 8841.5 | 15953.7 | ||||||||
| Nominal dollar GDP growth | 14.1 | 29.1 | 37.6 | -11.5 | -4.9 | 4.6 | 7.0 | 7.2 | 7.6 | 1.7 | 6.1 | 6.1 | 6.1 | ||||||
| PV of PPG external debt (in Millions of US dollars) | 900.8 | 1044.9 | 1399.6 | 1732.3 | 2048.4 | 2221.3 | 2362.1 | 2931.3 | 3955.0 | ||||||||||
| (PVt-PVt-1)/GDPt-1 (in percent) | 2.4 | 6.6 | 6.5 | 5.9 | 3.0 | 2.3 | 4.5 | 1.3 | 0.9 | 1.1 | |||||||||
Includes both public and private sector external debt.
Derived as [r - g - ρ(1+g)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = 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.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
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).
Moldova: External Debt Sustainability Framework with Additional Non-Concessional Borrowing and no Impact on Growth, 2006-2029 1/
(In percent of GDP, unless otherwise indicated)
| Actual | Historical Average | Standard Deviation | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2009-2014 Average | 2019 | 2029 | 2015-2029 Average | |||||||
| External debt (nominal) 1/ | 64.7 | 62.7 | 55.9 | 68.1 | 81.5 | 88.7 | 92.8 | 92.8 | 92.0 | 87.8 | 69.5 | ||||||||
| o/w public and publicly guaranteed (PPG) | 25.6 | 19.8 | 15.7 | 22.4 | 30.9 | 36.8 | 41.0 | 41.1 | 40.5 | 37.3 | 25.9 | ||||||||
| Change in external debt | 2.5 | -2.0 | -6.8 | 12.2 | 13.4 | 7.2 | 4.1 | 0.0 | -0.8 | -1.6 | -1.4 | ||||||||
| Identified net debt-creating flows | -2.1 | -9.3 | -10.7 | 13.9 | 8.3 | 7.2 | 3.9 | 1.5 | 0.4 | 1.0 | 1.2 | ||||||||
| Non-interest current account deficit | 10.3 | 15.5 | 16.6 | 6.0 | 6.6 | 7.5 | 9.4 | 10.5 | 9.0 | 7.8 | 6.8 | 6.9 | 7.1 | 7.0 | |||||
| Deficit in balance of goods and services | 47.1 | 52.5 | 53.0 | 33.0 | 38.8 | 39.9 | 39.1 | 38.7 | 38.3 | 37.4 | 35.4 | ||||||||
| Exports | 44.8 | 45.4 | 41.0 | 35.6 | 41.0 | 47.2 | 49.8 | 51.7 | 53.0 | 55.5 | 58.4 | ||||||||
| Imports | 91.9 | 97.9 | 94.0 | 68.5 | 79.9 | 87.1 | 88.9 | 90.4 | 91.3 | 93.0 | 93.8 | ||||||||
| Net current transfers (negative = inflow) | -39.1 | -40.0 | -38.4 | -29.9 | 8.5 | -27.2 | -32.4 | -32.5 | -33.1 | -33.9 | -34.5 | -32.6 | -29.2 | -31.6 | |||||
| o/w official | -1.9 | -1.7 | -2.0 | -1.5 | -3.2 | -2.5 | -1.8 | -1.7 | -1.6 | -1.6 | -1.6 | ||||||||
| Other current account flows (negative = net inflow) | 2.3 | 3.0 | 1.9 | 1.7 | 3.1 | 3.1 | 3.1 | 3.0 | 3.0 | 2.2 | 0.9 | ||||||||
| Net FDI (negative = inflow) | -6.9 | -11.9 | -11.4 | -6.5 | 3.4 | -1.7 | -3.9 | -4.9 | -5.2 | -6.0 | -6.4 | -6.8 | -7.2 | -6.9 | |||||
| Endogenous debt dynamics 2/ | -5.5 | -13.0 | -15.9 | 8.1 | 2.7 | 1.6 | 0.0 | -0.4 | 0.1 | 0.9 | 1.3 | ||||||||
| Contribution from nominal interest rate | 2.1 | 1.6 | 1.3 | 2.5 | 3.8 | 3.9 | 4.2 | 3.9 | 4.4 | 4.2 | 3.9 | ||||||||
| Contribution from real GDP growth | -2.6 | -1.5 | -3.6 | 5.7 | -1.1 | -2.3 | -4.1 | -4.3 | -4.3 | -3.4 | -2.7 | ||||||||
| Contribution from price and exchange rate changes | -5.1 | -13.1 | -13.6 | … | … | … | … | … | … | … | … | ||||||||
| Residual (3-4) 3/ | 4.7 | 7.3 | 3.9 | -1.7 | 5.1 | 0.0 | 0.3 | -1.5 | -1.2 | -2.6 | -2.6 | ||||||||
| o/w exceptional financing | -2.5 | -3.1 | -2.6 | -1.3 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
| PV of external debt 4/ | … | … | 55.1 | 67.4 | 78.7 | 84.9 | 88.3 | 88.4 | 87.7 | 84.0 | 68.6 | ||||||||
| In percent of exports | … | … | 134.3 | 189.3 | 191.7 | 179.6 | 177.2 | 171.1 | 165.5 | 151.2 | 117.5 | ||||||||
| PV of PPG external debt | … | … | 14.9 | 21.6 | 28.1 | 33.0 | 36.5 | 36.7 | 36.3 | 33.5 | 25.1 | ||||||||
| In percent of exports | … | … | 36.3 | 60.7 | 68.4 | 69.8 | 73.3 | 71.0 | 68.4 | 60.3 | 42.9 | ||||||||
| In percent of government revenues | … | … | 38.3 | 60.2 | 78.2 | 89.8 | 97.5 | 93.9 | 92.0 | 85.1 | 63.6 | ||||||||
| Debt service-to-exports ratio (in percent) | 15.1 | 13.7 | 16.6 | 19 | 21 | 17 | 19 | 17 | 20 | 26.2 | 24.9 | ||||||||
| PPG debt service-to-exports ratio (in percent) | 7.0 | 3.9 | 3.3 | 4.7 | 4.1 | 3.5 | 3.8 | 4.0 | 3.9 | 6.7 | 5.5 | ||||||||
| PPG debt service-to-revenue ratio (in percent) | 8.0 | 4.4 | 3.5 | 4.6 | 4.6 | 4.5 | 5.1 | 5.3 | 5.3 | 9.4 | 8.2 | ||||||||
| Total gross financing need (Millions of U.S. dollars) | 1118.9 | 1332.9 | 1865.3 | 2057.4 | 2078.7 | 2086.2 | 2108.5 | 2022.9 | 2079.0 | 2659.3 | 3679.6 | ||||||||
| Non-interest current account deficit that stabilizes debt ratio | 7.7 | 17.5 | 23.3 | -4.7 | -3.9 | 3.3 | 4.9 | 7.9 | 7.6 | 8.5 | 8.5 | ||||||||
| Key macroeconomic assumptions | |||||||||||||||||||
| Real GDP growth (in percent) | 4.8 | 3.0 | 7.8 | 5.0 | 3.6 | -9.0 | 1.5 | 3.0 | 5.0 | 5.0 | 5.0 | 1.8 | 4.0 | 4.0 | 4.0 | ||||
| GDP deflator in US dollar terms (change in percent) | 8.9 | 25.4 | 27.6 | 9.4 | 15.7 | -2.8 | -6.3 | 1.6 | 1.9 | 2.1 | 2.4 | -0.2 | 2.0 | 2.0 | 2.0 | ||||
| Effective interest rate (percent) 5/ | 3.9 | 3.2 | 2.8 | 4.1 | 0.8 | 3.9 | 5.3 | 5.0 | 5.0 | 4.5 | 5.1 | 4.8 | 5.0 | 5.9 | 5.4 | ||||
| Growth of exports of G&S (US dollar terms, in percent) | 1.5 | 30.9 | 24.3 | 13.2 | 15.7 | -23.2 | 9.6 | 20.4 | 12.9 | 11.2 | 10.4 | 6.9 | 6.6 | 6.6 | 6.8 | ||||
| Growth of imports of G&S (US dollar terms, in percent) | 15.3 | 37.5 | 32.1 | 18.7 | 20.9 | -35.5 | 10.8 | 14.2 | 9.3 | 9.0 | 8.7 | 2.7 | 6.3 | 6.2 | 6.3 | ||||
| Grant element of new public sector borrowing (in percent) | … | … | … | … | … | -1.1 | 23.1 | 18.1 | 18.1 | 18.0 | 19.2 | 15.9 | 11.5 | -2.4 | 6.6 | ||||
| Government revenues (excluding grants, in percent of GDP) | 39.2 | 39.9 | 38.9 | 35.9 | 35.9 | 36.7 | 37.5 | 39.1 | 39.4 | 39.4 | 39.4 | 39.4 | |||||||
| Aid flows (in Millions of US dollars) 7/ | 46.6 | 126.1 | 127.0 | 123.4 | 249.4 | 191.0 | 162.8 | 162.8 | 162.8 | 188.0 | 254.1 | ||||||||
| o/w Grants | 24.0 | 79.9 | 102.8 | 99.7 | 161.4 | 131.0 | 102.8 | 102.8 | 102.8 | 138.0 | 249.1 | ||||||||
| o/w Concessional loans | 22.6 | 46.2 | 24.2 | 23.7 | 88.0 | 60.0 | 60.0 | 60.0 | 60.0 | 50.0 | 5.0 | ||||||||
| Grant-equivalent financing (in percent of GDP) 8/ | … | … | … | 1.8 | 5.5 | 4.0 | 3.2 | 2.5 | 2.2 | 2.0 | 1.5 | 1.8 | |||||||
| Grant-equivalent financing (in percent of external financing) 8/ | … | … | … | 33.1 | 41.4 | 36.7 | 33.8 | 41.0 | 43.9 | 35.8 | 32.2 | 36.6 | |||||||
| Memorandum items: | |||||||||||||||||||
| Nominal GDP (Millions of US dollars) | 3408.4 | 4401.1 | 6054.8 | 5359.0 | 5094.8 | 5330.4 | 5705.7 | 6119.2 | 6581.8 | 8841.5 | 15953.7 | ||||||||
| Nominal dollar GDP growth | 14.1 | 29.1 | 37.6 | -11.5 | -4.9 | 4.6 | 7.0 | 7.2 | 7.6 | 1.7 | 6.1 | 6.1 | 6.1 | ||||||
| PV of PPG external debt (in Millions of US dollars) | 900.8 | 1044.9 | 1399.6 | 1732.3 | 2048.4 | 2221.3 | 2362.1 | 2931.3 | 3955.0 | ||||||||||
| (PVt-PVt-1)/GDPt-1 (in percent) | 2.4 | 6.6 | 6.5 | 5.9 | 3.0 | 2.3 | 4.5 | 1.3 | 0.9 | 1.1 | |||||||||
Includes both public and private sector external debt.
Derived as [r - g - ρ(1+g)]/(1+g+ρ+gρ) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and ρ = 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.
Historical averages and standard deviations are generally derived over the past 10 years, subject to data availability.
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).
Moldova: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt with Additional Non-Concessional Borrowing and no Impact on Growth, 2009-2029
(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 assumingan 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.
Moldova: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt with Additional Non-Concessional Borrowing and no Impact on Growth, 2009-2029
(In percent)
| Projections | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2029 | |
| PV of debt-to GDP ratio | ||||||||||||
| Baseline | 22 | 28 | 33 | 37 | 37 | 36 | 36 | 35 | 35 | 34 | 34 | 25 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 22 | 17 | 14 | 12 | 10 | 9 | 8 | 7 | 6 | 5 | 3 | 0 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 22 | 32 | 38 | 43 | 44 | 44 | 44 | 45 | 45 | 45 | 45 | 40 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 22 | 26 | 30 | 33 | 32 | 31 | 30 | 29 | 28 | 27 | 26 | 18 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 22 | 30 | 47 | 48 | 47 | 46 | 44 | 41 | 39 | 37 | 35 | 19 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 22 | 26 | 32 | 35 | 34 | 33 | 32 | 31 | 29 | 28 | 27 | 20 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 22 | 37 | 53 | 55 | 54 | 52 | 49 | 46 | 43 | 41 | 38 | 20 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 22 | 27 | 40 | 42 | 41 | 40 | 38 | 36 | 34 | 32 | 30 | 17 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 22 | 38 | 44 | 47 | 47 | 45 | 43 | 41 | 40 | 38 | 37 | 27 |
| PV of debt-to-exports ratio | ||||||||||||
| Baseline | 61 | 68 | 70 | 73 | 71 | 68 | 67 | 65 | 63 | 62 | 60 | 43 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 61 | 41 | 30 | 25 | 19 | 16 | 14 | 12 | 10 | 8 | 6 | 0 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 61 | 78 | 81 | 86 | 84 | 83 | 82 | 82 | 81 | 81 | 80 | 68 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 61 | 63 | 63 | 65 | 61 | 57 | 54 | 52 | 49 | 47 | 45 | 31 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 61 | 83 | 137 | 135 | 127 | 119 | 113 | 106 | 98 | 92 | 86 | 46 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 61 | 63 | 63 | 65 | 61 | 57 | 54 | 52 | 49 | 47 | 45 | 31 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 61 | 91 | 112 | 110 | 104 | 97 | 91 | 85 | 79 | 73 | 68 | 34 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 61 | 76 | 112 | 111 | 105 | 98 | 93 | 87 | 81 | 76 | 72 | 39 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 61 | 63 | 63 | 65 | 61 | 57 | 54 | 52 | 49 | 47 | 45 | 31 |
| PV of debt-to-revenue ratio | ||||||||||||
| Baseline | 60 | 78 | 90 | 98 | 94 | 92 | 91 | 90 | 89 | 87 | 85 | 64 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 60 | 47 | 38 | 33 | 26 | 22 | 20 | 17 | 14 | 11 | 8 | 0 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 60 | 89 | 104 | 114 | 112 | 111 | 112 | 113 | 114 | 113 | 113 | 101 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 60 | 73 | 82 | 87 | 82 | 78 | 76 | 73 | 70 | 67 | 65 | 47 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 60 | 84 | 127 | 129 | 121 | 116 | 111 | 105 | 99 | 93 | 88 | 49 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 60 | 73 | 88 | 93 | 88 | 84 | 81 | 77 | 75 | 72 | 69 | 50 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 60 | 104 | 144 | 146 | 137 | 131 | 125 | 117 | 110 | 103 | 96 | 50 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 60 | 76 | 110 | 112 | 106 | 101 | 97 | 91 | 86 | 81 | 77 | 44 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 60 | 107 | 119 | 126 | 119 | 114 | 109 | 105 | 101 | 97 | 94 | 67 |
| Debt service-to-exports ratio | ||||||||||||
| Baseline | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 6 | 6 | 7 | 7 | 6 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 5 | 3 | 2 | 2 | 2 | 2 | 1 | 1 | 1 | 1 | 1 | 0 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 5 | 4 | 4 | 5 | 5 | 5 | 5 | 7 | 7 | 7 | 7 | 8 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 5 | 6 | 6 | 4 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 5 | 5 | 5 | 7 | 7 | 6 | 7 | 11 | 11 | 11 | 11 | 6 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 5 | 6 | 6 | 4 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 5 | 4 | 4 | 5 | 5 | 5 | 6 | 9 | 9 | 9 | 9 | 5 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 5 | 4 | 4 | 5 | 6 | 5 | 6 | 9 | 9 | 9 | 9 | 5 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 5 | 6 | 6 | 4 |
| Debt service-to-revenue ratio | ||||||||||||
| Baseline | 5 | 5 | 4 | 5 | 5 | 5 | 6 | 8 | 9 | 9 | 9 | 8 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 5 | 4 | 3 | 3 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 0 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 5 | 5 | 5 | 6 | 7 | 6 | 7 | 10 | 10 | 9 | 9 | 12 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 5 | 5 | 4 | 5 | 5 | 5 | 5 | 7 | 8 | 8 | 8 | 6 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 5 | 5 | 5 | 6 | 6 | 6 | 7 | 11 | 11 | 11 | 11 | 7 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 5 | 5 | 5 | 5 | 5 | 5 | 6 | 8 | 8 | 9 | 9 | 7 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 5 | 5 | 5 | 7 | 7 | 7 | 9 | 12 | 13 | 13 | 12 | 7 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 5 | 4 | 4 | 6 | 6 | 5 | 6 | 9 | 10 | 10 | 10 | 6 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 5 | 7 | 6 | 7 | 7 | 7 | 8 | 10 | 11 | 12 | 12 | 9 |
| Memorandum item: | ||||||||||||
| Grant element assumed on residual financing (i.e., financing required above baseline) 6/ | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 |
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 assumingan 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.
Moldova: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt with Additional Non-Concessional Borrowing and no Impact on Growth, 2009-2029
(In percent)
| Projections | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2029 | |
| PV of debt-to GDP ratio | ||||||||||||
| Baseline | 22 | 28 | 33 | 37 | 37 | 36 | 36 | 35 | 35 | 34 | 34 | 25 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 22 | 17 | 14 | 12 | 10 | 9 | 8 | 7 | 6 | 5 | 3 | 0 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 22 | 32 | 38 | 43 | 44 | 44 | 44 | 45 | 45 | 45 | 45 | 40 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 22 | 26 | 30 | 33 | 32 | 31 | 30 | 29 | 28 | 27 | 26 | 18 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 22 | 30 | 47 | 48 | 47 | 46 | 44 | 41 | 39 | 37 | 35 | 19 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 22 | 26 | 32 | 35 | 34 | 33 | 32 | 31 | 29 | 28 | 27 | 20 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 22 | 37 | 53 | 55 | 54 | 52 | 49 | 46 | 43 | 41 | 38 | 20 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 22 | 27 | 40 | 42 | 41 | 40 | 38 | 36 | 34 | 32 | 30 | 17 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 22 | 38 | 44 | 47 | 47 | 45 | 43 | 41 | 40 | 38 | 37 | 27 |
| PV of debt-to-exports ratio | ||||||||||||
| Baseline | 61 | 68 | 70 | 73 | 71 | 68 | 67 | 65 | 63 | 62 | 60 | 43 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 61 | 41 | 30 | 25 | 19 | 16 | 14 | 12 | 10 | 8 | 6 | 0 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 61 | 78 | 81 | 86 | 84 | 83 | 82 | 82 | 81 | 81 | 80 | 68 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 61 | 63 | 63 | 65 | 61 | 57 | 54 | 52 | 49 | 47 | 45 | 31 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 61 | 83 | 137 | 135 | 127 | 119 | 113 | 106 | 98 | 92 | 86 | 46 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 61 | 63 | 63 | 65 | 61 | 57 | 54 | 52 | 49 | 47 | 45 | 31 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 61 | 91 | 112 | 110 | 104 | 97 | 91 | 85 | 79 | 73 | 68 | 34 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 61 | 76 | 112 | 111 | 105 | 98 | 93 | 87 | 81 | 76 | 72 | 39 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 61 | 63 | 63 | 65 | 61 | 57 | 54 | 52 | 49 | 47 | 45 | 31 |
| PV of debt-to-revenue ratio | ||||||||||||
| Baseline | 60 | 78 | 90 | 98 | 94 | 92 | 91 | 90 | 89 | 87 | 85 | 64 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 60 | 47 | 38 | 33 | 26 | 22 | 20 | 17 | 14 | 11 | 8 | 0 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 60 | 89 | 104 | 114 | 112 | 111 | 112 | 113 | 114 | 113 | 113 | 101 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 60 | 73 | 82 | 87 | 82 | 78 | 76 | 73 | 70 | 67 | 65 | 47 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 60 | 84 | 127 | 129 | 121 | 116 | 111 | 105 | 99 | 93 | 88 | 49 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 60 | 73 | 88 | 93 | 88 | 84 | 81 | 77 | 75 | 72 | 69 | 50 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 60 | 104 | 144 | 146 | 137 | 131 | 125 | 117 | 110 | 103 | 96 | 50 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 60 | 76 | 110 | 112 | 106 | 101 | 97 | 91 | 86 | 81 | 77 | 44 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 60 | 107 | 119 | 126 | 119 | 114 | 109 | 105 | 101 | 97 | 94 | 67 |
| Debt service-to-exports ratio | ||||||||||||
| Baseline | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 6 | 6 | 7 | 7 | 6 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 5 | 3 | 2 | 2 | 2 | 2 | 1 | 1 | 1 | 1 | 1 | 0 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 5 | 4 | 4 | 5 | 5 | 5 | 5 | 7 | 7 | 7 | 7 | 8 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 5 | 6 | 6 | 4 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 5 | 5 | 5 | 7 | 7 | 6 | 7 | 11 | 11 | 11 | 11 | 6 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 5 | 6 | 6 | 4 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 5 | 4 | 4 | 5 | 5 | 5 | 6 | 9 | 9 | 9 | 9 | 5 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 5 | 4 | 4 | 5 | 6 | 5 | 6 | 9 | 9 | 9 | 9 | 5 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 5 | 4 | 3 | 4 | 4 | 4 | 4 | 5 | 5 | 6 | 6 | 4 |
| Debt service-to-revenue ratio | ||||||||||||
| Baseline | 5 | 5 | 4 | 5 | 5 | 5 | 6 | 8 | 9 | 9 | 9 | 8 |
| A. Alternative Scenarios | ||||||||||||
| A1. Key variables at their historical averages in 2009-2029 1/ | 5 | 4 | 3 | 3 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 0 |
| A2. New public sector loans on less favorable terms in 2009-2029 2 | 5 | 5 | 5 | 6 | 7 | 6 | 7 | 10 | 10 | 9 | 9 | 12 |
| B. Bound Tests | ||||||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2010-2011 | 5 | 5 | 4 | 5 | 5 | 5 | 5 | 7 | 8 | 8 | 8 | 6 |
| B2. Export value growth at historical average minus one standard deviation in 2010-2011 3/ | 5 | 5 | 5 | 6 | 6 | 6 | 7 | 11 | 11 | 11 | 11 | 7 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2010-2011 | 5 | 5 | 5 | 5 | 5 | 5 | 6 | 8 | 8 | 9 | 9 | 7 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2010-2011 4/ | 5 | 5 | 5 | 7 | 7 | 7 | 9 | 12 | 13 | 13 | 12 | 7 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 5 | 4 | 4 | 6 | 6 | 5 | 6 | 9 | 10 | 10 | 10 | 6 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2010 5/ | 5 | 7 | 6 | 7 | 7 | 7 | 8 | 10 | 11 | 12 | 12 | 9 |
| Memorandum item: | ||||||||||||
| Grant element assumed on residual financing (i.e., financing required above baseline) 6/ | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 |
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 assumingan 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.
Moldova: Public Sector Debt Sustainability Framework, Baseline Scenario with Additional Non-Concessional Borrowing and no Impact on Growth, 2009-2029
(In percent of GDP, unless otherwise indicated)
General government gross debt, excluding 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.
Moldova: Public Sector Debt Sustainability Framework, Baseline Scenario with Additional Non-Concessional Borrowing and no Impact on Growth, 2009-2029
(In percent of GDP, unless otherwise indicated)
| Actual | Estimate | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | Average | Standard Deviation | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2009-14 Average | 2019 | 2029 | 2015-29 Average | ||||
| Public sector debt 1/ | 34.0 | 26.8 | 21.3 | 30.9 | 39.2 | 44.2 | 47.5 | 46.7 | 45.4 | 41.3 | 28.3 | |||||||
| o/w foreign-currency denominated | 25.6 | 19.8 | 15.7 | 22.4 | 30.9 | 36.8 | 41.0 | 41.1 | 40.5 | 37.3 | 25.9 | |||||||
| Change in public sector debt | -3.6 | -7.2 | -5.5 | 9.6 | 8.2 | 5.0 | 3.3 | -0.7 | -1.3 | -1.1 | -1.0 | |||||||
| Identified debt-creating flows | -6.0 | -8.5 | -6.3 | 12.9 | 5.1 | 2.2 | -0.6 | -2.8 | -2.6 | -1.6 | -0.8 | |||||||
| Primary deficit | -1.3 | -1.0 | -0.2 | -2.0 | 3.5 | 7.5 | 5.7 | 3.5 | 1.6 | 0.1 | -0.4 | 3.0 | -0.5 | -0.3 | -0.4 | |||
| Revenue and grants | 39.9 | 41.7 | 40.6 | 37.8 | 39.0 | 39.2 | 39.3 | 40.8 | 41.0 | 41.0 | 41.0 | |||||||
| of which: grants | 0.7 | 1.8 | 1.7 | 1.9 | 3.2 | 2.5 | 1.8 | 1.7 | 1.6 | 1.6 | 1.6 | |||||||
| Primary (noninterest) expenditure | 38.6 | 40.8 | 40.4 | 45.3 | 44.7 | 42.7 | 40.8 | 40.8 | 40.5 | 40.5 | 40.6 | |||||||
| Automatic debt dynamics | -4.3 | -7.3 | -4.2 | 5.8 | 0.0 | -0.7 | -1.6 | -2.2 | -2.0 | -1.2 | -0.5 | |||||||
| Contribution from interest rate/growth differential | -3.7 | -6.0 | -5.3 | 3.9 | 1.8 | -0.5 | -1.6 | -1.9 | -2.0 | -1.2 | -0.5 | |||||||
| of which: contribution from average real interest rate | -2.0 | -5.0 | -3.4 | 1.7 | 2.3 | 0.7 | 0.5 | 0.3 | 0.2 | 0.5 | 0.6 | |||||||
| of which: contribution from real GDP growth | -1.7 | -1.0 | -1.9 | 2.1 | -0.5 | -1.1 | -2.1 | -2.3 | -2.2 | -1.6 | -1.1 | |||||||
| Contribution from real exchange rate depreciation | -0.6 | -1.3 | 1.1 | 2.0 | -1.9 | -0.2 | 0.1 | -0.3 | 0.0 | … | … | |||||||
| Other identified debt-creating flows | -0.4 | -0.3 | -1.9 | -0.4 | -0.6 | -0.6 | -0.6 | -0.7 | -0.1 | 0.0 | 0.0 | |||||||
| Privatization receipts (negative) | -0.4 | -0.3 | -1.9 | -0.4 | -0.6 | -0.6 | -0.6 | -0.7 | -0.1 | 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 | |||||||
| 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 | |||||||
| 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 | |||||||
| Residual, including asset changes | 2.3 | 1.3 | 0.8 | -3.3 | 3.1 | 2.8 | 3.9 | 2.1 | 1.3 | 0.5 | -0.1 | |||||||
| Other Sustainability Indicators | ||||||||||||||||||
| PV of public sector debt | 8.5 | 7.0 | 20.5 | 30.2 | 36.3 | 40.4 | 43.0 | 42.3 | 41.2 | 37.5 | 27.5 | |||||||
| o/w foreign-currency denominated | 0.0 | 0.0 | 14.9 | 21.6 | 28.1 | 33.0 | 36.5 | 36.7 | 36.3 | 33.5 | 25.1 | |||||||
| o/w external | … | … | 14.9 | 21.6 | 28.1 | 33.0 | 36.5 | 36.7 | 36.3 | 33.5 | 25.1 | |||||||
| PV of contingent liabilities (not included in public sector debt) | … | … | … | … | … | … | … | … | … | … | … | |||||||
| Gross financing need 2/ | 6.9 | 4.8 | 4.9 | 12.9 | 15.2 | 13.2 | 10.7 | 8.7 | 7.4 | 7.6 | 5.6 | |||||||
| PV of public sector debt-to-revenue and grants ratio (in percent) | 21.2 | 16.8 | 50.4 | 79.9 | 93.0 | 103.0 | 109.4 | 103.9 | 100.6 | 91.5 | 67.1 | |||||||
| PV of public sector debt-to-revenue ratio (in percent) | 21.6 | 17.6 | 52.7 | 84.1 | 101.3 | 109.9 | 114.7 | 108.3 | 104.5 | 95.2 | 69.8 | |||||||
| o/w external 3/ | … | … | 38.3 | 60.2 | 78.2 | 89.8 | 97.5 | 93.9 | 92.0 | 85.1 | 63.6 | |||||||
| Debt service-to-revenue and grants ratio (in percent) 4/ | 9.2 | 6.9 | 6.0 | 7.2 | 6.1 | 7.1 | 7.3 | 7.1 | 6.9 | 10.6 | 9.0 | |||||||
| Debt service-to-revenue ratio (in percent) 4/ | 9.3 | 7.2 | 6.3 | 7.6 | 6.7 | 7.6 | 7.6 | 7.4 | 7.2 | 11.0 | 9.3 | |||||||
| Primary deficit that stabilizes the debt-to-GDP ratio | 2.3 | 6.2 | 5.3 | -2.1 | -2.5 | -1.5 | -1.7 | 0.8 | 0.8 | 0.6 | 0.6 | |||||||
| Key macroeconomic and fiscal assumptions | ||||||||||||||||||
| Real GDP growth (in percent) | 4.8 | 3.0 | 7.8 | 5.0 | 3.6 | -9.0 | 1.5 | 3.0 | 5.0 | 5.0 | 5.0 | 1.8 | 4.0 | 4.0 | 4.0 | |||
| Average nominal interest rate on forex debt (in percent) | 3.3 | 1.9 | 1.8 | 3.3 | 1.1 | 2.3 | 2.5 | 2.2 | 2.2 | 2.1 | 2.1 | 2.2 | 2.4 | 3.4 | 2.7 | |||
| Average real interest rate on domestic debt (in percent) | -6.6 | -3.8 | 5.4 | -0.5 | 4.8 | 13.8 | 2.6 | 6.1 | 5.5 | 5.5 | 5.8 | 6.5 | 7.6 | 10.0 | 8.3 | |||
| Real exchange rate depreciation (in percent, + indicates depreciation) | -2.4 | -6.5 | 7.6 | -3.7 | 10.5 | 10.8 | … | … | … | … | … | … | … | … | … | |||
| Inflation rate (GDP deflator, in percent) | 13.4 | 15.9 | 9.2 | 16.0 | 10.1 | 3.9 | 6.5 | 4.7 | 4.7 | 4.3 | 4.0 | 4.7 | 4.0 | 4.0 | 4.0 | |||
| Growth of real primary spending (deflated by GDP deflator, in percent) | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| Grant element of new external borrowing (in percent) | … | … | … | … | … | -1.1 | 23.1 | 18.1 | 18.1 | 18.0 | 19.2 | 15.9 | 11.5 | -2.4 | … | |||
General government gross debt, excluding 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.
Moldova: Public Sector Debt Sustainability Framework, Baseline Scenario with Additional Non-Concessional Borrowing and no Impact on Growth, 2009-2029
(In percent of GDP, unless otherwise indicated)
| Actual | Estimate | Projections | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | Average | Standard Deviation | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2009-14 Average | 2019 | 2029 | 2015-29 Average | ||||
| Public sector debt 1/ | 34.0 | 26.8 | 21.3 | 30.9 | 39.2 | 44.2 | 47.5 | 46.7 | 45.4 | 41.3 | 28.3 | |||||||
| o/w foreign-currency denominated | 25.6 | 19.8 | 15.7 | 22.4 | 30.9 | 36.8 | 41.0 | 41.1 | 40.5 | 37.3 | 25.9 | |||||||
| Change in public sector debt | -3.6 | -7.2 | -5.5 | 9.6 | 8.2 | 5.0 | 3.3 | -0.7 | -1.3 | -1.1 | -1.0 | |||||||
| Identified debt-creating flows | -6.0 | -8.5 | -6.3 | 12.9 | 5.1 | 2.2 | -0.6 | -2.8 | -2.6 | -1.6 | -0.8 | |||||||
| Primary deficit | -1.3 | -1.0 | -0.2 | -2.0 | 3.5 | 7.5 | 5.7 | 3.5 | 1.6 | 0.1 | -0.4 | 3.0 | -0.5 | -0.3 | -0.4 | |||
| Revenue and grants | 39.9 | 41.7 | 40.6 | 37.8 | 39.0 | 39.2 | 39.3 | 40.8 | 41.0 | 41.0 | 41.0 | |||||||
| of which: grants | 0.7 | 1.8 | 1.7 | 1.9 | 3.2 | 2.5 | 1.8 | 1.7 | 1.6 | 1.6 | 1.6 | |||||||
| Primary (noninterest) expenditure | 38.6 | 40.8 | 40.4 | 45.3 | 44.7 | 42.7 | 40.8 | 40.8 | 40.5 | 40.5 | 40.6 | |||||||
| Automatic debt dynamics | -4.3 | -7.3 | -4.2 | 5.8 | 0.0 | -0.7 | -1.6 | -2.2 | -2.0 | -1.2 | -0.5 | |||||||
| Contribution from interest rate/growth differential | -3.7 | -6.0 | -5.3 | 3.9 | 1.8 | -0.5 | -1.6 | -1.9 | -2.0 | -1.2 | -0.5 | |||||||
| of which: contribution from average real interest rate | -2.0 | -5.0 | -3.4 | 1.7 | 2.3 | 0.7 | 0.5 | 0.3 | 0.2 | 0.5 | 0.6 | |||||||
| of which: contribution from real GDP growth | -1.7 | -1.0 | -1.9 | 2.1 | -0.5 | -1.1 | -2.1 | -2.3 | -2.2 | -1.6 | -1.1 | |||||||
| Contribution from real exchange rate depreciation | -0.6 | -1.3 | 1.1 | 2.0 | -1.9 | -0.2 | 0.1 | -0.3 | 0.0 | … | … | |||||||
| Other identified debt-creating flows | -0.4 | -0.3 | -1.9 | -0.4 | -0.6 | -0.6 | -0.6 | -0.7 | -0.1 | 0.0 | 0.0 | |||||||
| Privatization receipts (negative) | -0.4 | -0.3 | -1.9 | -0.4 | -0.6 | -0.6 | -0.6 | -0.7 | -0.1 | 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 | |||||||
| 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 | |||||||
| 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 | |||||||
| Residual, including asset changes | 2.3 | 1.3 | 0.8 | -3.3 | 3.1 | 2.8 | 3.9 | 2.1 | 1.3 | 0.5 | -0.1 | |||||||
| Other Sustainability Indicators | ||||||||||||||||||
| PV of public sector debt | 8.5 | 7.0 | 20.5 | 30.2 | 36.3 | 40.4 | 43.0 | 42.3 | 41.2 | 37.5 | 27.5 | |||||||
| o/w foreign-currency denominated | 0.0 | 0.0 | 14.9 | 21.6 | 28.1 | 33.0 | 36.5 | 36.7 | 36.3 | 33.5 | 25.1 | |||||||
| o/w external | … | … | 14.9 | 21.6 | 28.1 | 33.0 | 36.5 | 36.7 | 36.3 | 33.5 | 25.1 | |||||||
| PV of contingent liabilities (not included in public sector debt) | … | … | … | … | … | … | … | … | … | … | … | |||||||
| Gross financing need 2/ | 6.9 | 4.8 | 4.9 | 12.9 | 15.2 | 13.2 | 10.7 | 8.7 | 7.4 | 7.6 | 5.6 | |||||||
| PV of public sector debt-to-revenue and grants ratio (in percent) | 21.2 | 16.8 | 50.4 | 79.9 | 93.0 | 103.0 | 109.4 | 103.9 | 100.6 | 91.5 | 67.1 | |||||||
| PV of public sector debt-to-revenue ratio (in percent) | 21.6 | 17.6 | 52.7 | 84.1 | 101.3 | 109.9 | 114.7 | 108.3 | 104.5 | 95.2 | 69.8 | |||||||
| o/w external 3/ | … | … | 38.3 | 60.2 | 78.2 | 89.8 | 97.5 | 93.9 | 92.0 | 85.1 | 63.6 | |||||||
| Debt service-to-revenue and grants ratio (in percent) 4/ | 9.2 | 6.9 | 6.0 | 7.2 | 6.1 | 7.1 | 7.3 | 7.1 | 6.9 | 10.6 | 9.0 | |||||||
| Debt service-to-revenue ratio (in percent) 4/ | 9.3 | 7.2 | 6.3 | 7.6 | 6.7 | 7.6 | 7.6 | 7.4 | 7.2 | 11.0 | 9.3 | |||||||
| Primary deficit that stabilizes the debt-to-GDP ratio | 2.3 | 6.2 | 5.3 | -2.1 | -2.5 | -1.5 | -1.7 | 0.8 | 0.8 | 0.6 | 0.6 | |||||||
| Key macroeconomic and fiscal assumptions | ||||||||||||||||||
| Real GDP growth (in percent) | 4.8 | 3.0 | 7.8 | 5.0 | 3.6 | -9.0 | 1.5 | 3.0 | 5.0 | 5.0 | 5.0 | 1.8 | 4.0 | 4.0 | 4.0 | |||
| Average nominal interest rate on forex debt (in percent) | 3.3 | 1.9 | 1.8 | 3.3 | 1.1 | 2.3 | 2.5 | 2.2 | 2.2 | 2.1 | 2.1 | 2.2 | 2.4 | 3.4 | 2.7 | |||
| Average real interest rate on domestic debt (in percent) | -6.6 | -3.8 | 5.4 | -0.5 | 4.8 | 13.8 | 2.6 | 6.1 | 5.5 | 5.5 | 5.8 | 6.5 | 7.6 | 10.0 | 8.3 | |||
| Real exchange rate depreciation (in percent, + indicates depreciation) | -2.4 | -6.5 | 7.6 | -3.7 | 10.5 | 10.8 | … | … | … | … | … | … | … | … | … | |||
| Inflation rate (GDP deflator, in percent) | 13.4 | 15.9 | 9.2 | 16.0 | 10.1 | 3.9 | 6.5 | 4.7 | 4.7 | 4.3 | 4.0 | 4.7 | 4.0 | 4.0 | 4.0 | |||
| Growth of real primary spending (deflated by GDP deflator, in percent) | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||
| Grant element of new external borrowing (in percent) | … | … | … | … | … | -1.1 | 23.1 | 18.1 | 18.1 | 18.0 | 19.2 | 15.9 | 11.5 | -2.4 | … | |||
General government gross debt, excluding 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.
Moldova: Sensitivity Analysis for Key Indicators of Public Debt with Additional Non-Concessional Borrowing and no Impact on Growth, 2009-2029
Assumes that real GDP growth is at baseline minus one standard deviation divided by the square root of the length of the projection period.
Revenues are defined inclusive of grants.
Moldova: Sensitivity Analysis for Key Indicators of Public Debt with Additional Non-Concessional Borrowing and no Impact on Growth, 2009-2029
| Projections | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2019 | 2029 | |
| PV of Debt-to-GDP Ratio | ||||||||
| Baseline | 30 | 36 | 40 | 43 | 42 | 41 | 37 | 28 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 30 | 28 | 26 | 25 | 23 | 21 | 11 | 0 |
| A2. Primary balance is unchanged from 2009 | 30 | 38 | 46 | 55 | 61 | 67 | 100 | 152 |
| A3. Permanently lower GDP growth 1/ | 30 | 37 | 42 | 46 | 46 | 47 | 56 | 93 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 30 | 36 | 42 | 45 | 45 | 44 | 43 | 38 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 30 | 32 | 34 | 37 | 37 | 36 | 32 | 23 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 30 | 30 | 30 | 32 | 31 | 30 | 24 | 10 |
| B4. One-time 30 percent real depreciation in 2010 | 30 | 45 | 49 | 51 | 50 | 49 | 47 | 44 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 30 | 46 | 50 | 53 | 52 | 50 | 46 | 34 |
| PV of Debt-to-Revenue Ratio 2/ | ||||||||
| Baseline | 80 | 93 | 103 | 109 | 104 | 101 | 92 | 67 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 80 | 71 | 66 | 64 | 56 | 51 | 26 | 0 |
| A2. Primary balance is unchanged from 2009 | 80 | 98 | 118 | 139 | 150 | 164 | 244 | 371 |
| A3. Permanently lower GDP growth 1/ | 80 | 94 | 107 | 116 | 114 | 115 | 137 | 225 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 80 | 93 | 106 | 114 | 110 | 108 | 106 | 94 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 80 | 82 | 87 | 94 | 90 | 87 | 79 | 57 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 80 | 77 | 77 | 82 | 77 | 73 | 58 | 23 |
| B4. One-time 30 percent real depreciation in 2010 | 80 | 116 | 125 | 130 | 124 | 120 | 115 | 108 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 80 | 119 | 128 | 134 | 127 | 123 | 112 | 84 |
| Debt Service-to-Revenue Ratio 2/ | ||||||||
| Baseline | 7 | 6 | 7 | 7 | 7 | 7 | 11 | 9 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 7 | 6 | 6 | 5 | 5 | 5 | 5 | 0 |
| A2. Primary balance is unchanged from 2009 | 7 | 6 | 7 | 8 | 8 | 9 | 19 | 36 |
| A3. Permanently lower GDP growth 1/ | 7 | 6 | 7 | 8 | 7 | 7 | 13 | 22 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 7 | 6 | 7 | 7 | 7 | 7 | 12 | 11 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 7 | 6 | 7 | 6 | 6 | 6 | 9 | 8 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 7 | 6 | 6 | 6 | 6 | 6 | 7 | 5 |
| B4. One-time 30 percent real depreciation in 2010 | 7 | 7 | 9 | 10 | 10 | 10 | 16 | 18 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 7 | 6 | 8 | 9 | 8 | 8 | 13 | 11 |
Assumes that real GDP growth is at baseline minus one standard deviation divided by the square root of the length of the projection period.
Revenues are defined inclusive of grants.
Moldova: Sensitivity Analysis for Key Indicators of Public Debt with Additional Non-Concessional Borrowing and no Impact on Growth, 2009-2029
| Projections | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2019 | 2029 | |
| PV of Debt-to-GDP Ratio | ||||||||
| Baseline | 30 | 36 | 40 | 43 | 42 | 41 | 37 | 28 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 30 | 28 | 26 | 25 | 23 | 21 | 11 | 0 |
| A2. Primary balance is unchanged from 2009 | 30 | 38 | 46 | 55 | 61 | 67 | 100 | 152 |
| A3. Permanently lower GDP growth 1/ | 30 | 37 | 42 | 46 | 46 | 47 | 56 | 93 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 30 | 36 | 42 | 45 | 45 | 44 | 43 | 38 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 30 | 32 | 34 | 37 | 37 | 36 | 32 | 23 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 30 | 30 | 30 | 32 | 31 | 30 | 24 | 10 |
| B4. One-time 30 percent real depreciation in 2010 | 30 | 45 | 49 | 51 | 50 | 49 | 47 | 44 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 30 | 46 | 50 | 53 | 52 | 50 | 46 | 34 |
| PV of Debt-to-Revenue Ratio 2/ | ||||||||
| Baseline | 80 | 93 | 103 | 109 | 104 | 101 | 92 | 67 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 80 | 71 | 66 | 64 | 56 | 51 | 26 | 0 |
| A2. Primary balance is unchanged from 2009 | 80 | 98 | 118 | 139 | 150 | 164 | 244 | 371 |
| A3. Permanently lower GDP growth 1/ | 80 | 94 | 107 | 116 | 114 | 115 | 137 | 225 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 80 | 93 | 106 | 114 | 110 | 108 | 106 | 94 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 80 | 82 | 87 | 94 | 90 | 87 | 79 | 57 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 80 | 77 | 77 | 82 | 77 | 73 | 58 | 23 |
| B4. One-time 30 percent real depreciation in 2010 | 80 | 116 | 125 | 130 | 124 | 120 | 115 | 108 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 80 | 119 | 128 | 134 | 127 | 123 | 112 | 84 |
| Debt Service-to-Revenue Ratio 2/ | ||||||||
| Baseline | 7 | 6 | 7 | 7 | 7 | 7 | 11 | 9 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 7 | 6 | 6 | 5 | 5 | 5 | 5 | 0 |
| A2. Primary balance is unchanged from 2009 | 7 | 6 | 7 | 8 | 8 | 9 | 19 | 36 |
| A3. Permanently lower GDP growth 1/ | 7 | 6 | 7 | 8 | 7 | 7 | 13 | 22 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2010-2011 | 7 | 6 | 7 | 7 | 7 | 7 | 12 | 11 |
| B2. Primary balance is at historical average minus one standard deviations in 2010-2011 | 7 | 6 | 7 | 6 | 6 | 6 | 9 | 8 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 7 | 6 | 6 | 6 | 6 | 6 | 7 | 5 |
| B4. One-time 30 percent real depreciation in 2010 | 7 | 7 | 9 | 10 | 10 | 10 | 16 | 18 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2010 | 7 | 6 | 8 | 9 | 8 | 8 | 13 | 11 |
Assumes that real GDP growth is at baseline minus one standard deviation divided by the square root of the length of the projection period.
Revenues are defined inclusive of grants.
18. Under Scenario 2, the baseline external debt burden indicators remain under the thresholds, while the PV of debt-to-GDP ratio exceeds the threshold under some of the extreme tests. The outcome is similar to Scenario 1, indicating that the relatively benign picture in that scenario does not depend on assumptions about rising growth and exports.
IX. Debt Distress Classification and Conclusions
19. The risk of public debt distress in Moldova is low at present, but alternative scenarios indicate certain vulnerabilities. Under the baseline scenario, all indicators of PPG external debt remain in safe territory, except under the most extreme stress tests. Significant borrowing under the new Fund arrangement, combined with financing from other international partners, will increase the debt burden, but only temporarily, and to manageable levels. Stress tests under alternative scenarios, however, point to a potentially significant risk stemming from the interaction of stepped-up non-concessional borrowing with sluggish export growth and interest and exchange rate shocks, highlighting the need to seek financing at concessional terms, or at least at a fixed and low interest rate.
20. Moreover, the sizeable private external debt, the arrears on energy payments and Moldova’s history of debt distress warrant additional caution in public borrowing. Private debt is significantly larger than PPG debt and exceeds by far levels observed in other LICs. It could generate balance of payments pressures by competing with public debt for foreign exchange needed to cover the debt service. Moreover, the existing payment arrears for energy resources are a potential source of fiscal liability, though these risks are mitigated by the authorities’ plans to ensure tariff setting at cost-recovery levels. Moldova’s previous debt difficulties—the Eurobond rescheduling in 2002 and the Paris Club rescheduling in 2006—also calls for careful evaluation of the terms and uses of prospective external public borrowing.
The DSA scenarios presented in this document were produced jointly by Fund and Bank staffs following “Staff Guidance Note on the Application of the Joint Fund-Bank Debt Sustainability Framework for Low-Income Countries (LICs)” of October 06, 2008, available at www.imf.org/external/np/pp/eng/2008/070308.pdf and http://siteresources.worldbank.org/INTDEBTDEPT/PolicyPapers/21952151/39748MainExt.pdf.
Consistent with the definition of the general government in the Technical Memorandum of Understanding (TMU) for the new Fund-supported program, the public debt covers gross debt of the general government, while debts of state-owned enterprises are not included unless they are explicitly guaranteed by the government. In the absence of reliable data, both private and general government debt exclude liabilities of Transnistria, though press articles suggest large energy-related external arrears in that region. In line with the DSA guidelines, public debt includes liabilities towards the IMF.
The authorities requested a three-year blend of the Extended Credit Facility and the Extended Fund Facility with an access of SDR 369.6 million (300 percent of quota, or US$588 million), split equally between the two arrangements.
Average Country Policy and Institutional Assessment (CPIA) score for the last three years (2006–08) rates Moldova as a medium performer, and the DSA uses the indicative threshold indicators for countries in this category: 40 percent for the PV of debt-to-GDP ratio, 150 percent for the PV of debt-to-exports ratio, 250 percent for the PV of debt-to-revenue ratio, 20 percent for the debt service-to-exports ratio, and 30 percent for the debt service-to-revenue ratio. At the same time, in 2008—the last year for which the CPIA score is available—the CPIA rated Moldova as a high performing country.
In Moldova, remittances are classified as either current transfers or compensation of employees. Both categories are included in the DSA (under “current transfers”).
The amount is in line with the ceiling on nonconcessional external borrowing set in the Fund-supported program for 2010. This ceiling excludes borrowing from international financial institutions (IFIs). Availability of external financing, changes in the macroeconomic framework and the debt sustainability outlook, and the new Fund policy on debt limits will be taken into account in discussions of the quantitative targets on debt accumulation in subsequent years during program reviews.
