Abstract
2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Bhutan
Background
1. Public and publicly guaranteed (PPG) debt stood at 107 percent of GDP in FY2017. Bhutan borrows almost exclusively from official creditors, most of which is used to develop its hydropower sector. Hydropower projects comprised 77 percent of the PPG external debt stock in FY2017. These projects are mostly financed by India with debt denominated in Indian rupees. More than 99 percent of public and publicly guaranteed debt was from official creditors with India lending the largest share, 74 percent, followed by the Asian Development Bank (ADB), 11 percent, and the World Bank (IDA), 9 percent.
Outstanding PPG External Debt by Purpose, 2016/17
(in percent of outstanding debt)
Citation: IMF Staff Country Reports 2018, 300; 10.5089/9781484382073.002.A003
Sources: Royal Monetary AuthorityHydropower
(in percent of GDP)
Citation: IMF Staff Country Reports 2018, 300; 10.5089/9781484382073.002.A003
Source: Royal Monetary Authority2. Debt from the Government of India (GoI) to finance hydropower projects is closer in nature to foreign direct investment (FDI) as emphasized in the last two DSAs. All existing debt from India provides financing for projects under an intergovernmental agreement in which construction and financial risks are borne by the GoI and surplus electricity is sold to India at cost plus a 15 percent net return. The price of electricity is set at the time of construction, when costs are known, and the rate is agreed to be revisited every 3 years to incorporate changes in costs.2
Outstanding PPG External Debt by Creditor, 2016/17
(in percent of outstanding debt)
Citation: IMF Staff Country Reports 2018, 300; 10.5089/9781484382073.002.A003
Source: Royal Monetary AuthorityUnderlying Assumptions
3. Delays in the completion of major hydropower plants have hampered the expected acceleration in growth and consolidation of the current account deficit (CAD). Project delays have also shifted associated disbursements causing the nominal debt path to be lower than was anticipated in the 2016 DSA. These delays come with associated costs, for example, delayed and higher debt service costs, which have led to a deterioration in the present value (PV) of debt indicators.3 Nonetheless, at its highest level, the PV of non-Indian debt-to-GDP is 21 percent and remains well below Bhutan’s threshold for a high-risk rating (40 percent of GDP). Over the medium term, the current account is still expected to improve sharply, with construction imports falling and electricity exports doubling as a percent of GDP and hovering around 60 percent of exports.
Differences in Outturns and Assumptions from 2016
(in percent of GDP)
Citation: IMF Staff Country Reports 2018, 300; 10.5089/9781484382073.002.A003
Sources: Royal Monetary Authority and staff estimates4. The main baseline macroeconomic assumptions are as follows:
Present Value of PPG External Debt
(in percent of GDP)
Citation: IMF Staff Country Reports 2018, 300; 10.5089/9781484382073.002.A003
Sources: Royal Monetary Authority and staff estimatesReal sector. Historical growth estimates for FY2016 and FY2017 have been revised up by around one percentage point each year. Over the medium term, with production commencing in new large hydropower projects, growth is projected to remain strong, averaging around 6 percent, close to its average during the eleventh five-year plan. Long-term growth is projected to be around 6 percent.
Fiscal sector. When hydropower projects are completed, government revenues increase through both tax and non-tax revenues. As the completion of major projects has been delayed, these revenues will accrue mainly towards the end of the medium term. The fiscal deficit remains broadly balanced over the medium term, exhibiting a surplus towards the end of the five-year planning cycle as hydropower revenues from the newly commissioned projects are received.
External sector. The current account deficit (CAD) is expected to narrow sharply over the medium term, reaching a surplus in FY2023. CAD dynamics are driven by an increase in electricity exports from around 7 percent of GDP to around 20 percent of GDP and a decline in imports for the hydropower sector to nearly nil over the medium term.4 The overall balance of payments, which has been supported by grant financing, is set to remain positive over the medium term, supporting reserve accumulation. As grant financing declines over the long run, the current account surplus will support the overall balance. Bhutan’s borrowing from IDA is set to remain on concessional terms, as the country is eligible for credit financing under IDA’s small economy terms.
Key Macroeconomic Assumptions, 2018–2036
Key Macroeconomic Assumptions, 2018–2036
| 2016 DSA | 2018 DSA | |
|---|---|---|
| Real GDP growth (in percent) | 6.4 | 6.1 |
| GDP deflator in US dollar terms (change in percent) | 2.0 | 1.8 |
| Growth of exports of G&S (US dollar terms, in percent) | 9.7 | 6.7 |
| Growth of imports of G&S (US dollar terms, in percent) | 5.7 | 1.9 |
| Grant element of new public sector borrowing (in percent) | 27.3 | 30.4 |
| Government revenues (excluding grants, in percent of GDP) | 21.6 | 22.2 |
| Aid flows (in Billions of US dollars) | 0.1 | 0.1 |
| of which: Grants | 0.1 | 0.1 |
| of which: Concessional loans | 0.0 | 0.0 |
| Grant-equivalent financing (in percent of GDP) | 2.6 | 2.9 |
| Non-interest current account deficit | 1.1 | −3.3 |
| Net FDI (negative = inflow) | −1.5 | −0.6 |
| Public sector balance | −1.8 | −1.7 |
Key Macroeconomic Assumptions, 2018–2036
| 2016 DSA | 2018 DSA | |
|---|---|---|
| Real GDP growth (in percent) | 6.4 | 6.1 |
| GDP deflator in US dollar terms (change in percent) | 2.0 | 1.8 |
| Growth of exports of G&S (US dollar terms, in percent) | 9.7 | 6.7 |
| Growth of imports of G&S (US dollar terms, in percent) | 5.7 | 1.9 |
| Grant element of new public sector borrowing (in percent) | 27.3 | 30.4 |
| Government revenues (excluding grants, in percent of GDP) | 21.6 | 22.2 |
| Aid flows (in Billions of US dollars) | 0.1 | 0.1 |
| of which: Grants | 0.1 | 0.1 |
| of which: Concessional loans | 0.0 | 0.0 |
| Grant-equivalent financing (in percent of GDP) | 2.6 | 2.9 |
| Non-interest current account deficit | 1.1 | −3.3 |
| Net FDI (negative = inflow) | −1.5 | −0.6 |
| Public sector balance | −1.8 | −1.7 |
External DSA
5. The composition of hydropower debt is projected to remain dominated by debt contracted with India under the intergovernmental agreement. Other hydropower projects will be constructed under joint venture agreements and public-private partnerships (PPPs), where guarantees from the GoI are not available. Since the stock of debt will remain dominated by projects constructed under the intergovernmental agreement, which is more like FDI, vulnerabilities are contained. The government’s liabilities under projects already financed through PPPs are reflected in the DSA. Other contingent liabilities, for example from the banking sector, and external borrowing outside of hydropower are not a source of immediate risk.
Composition of External Debt Projections
(in percent of GDP)
Citation: IMF Staff Country Reports 2018, 300; 10.5089/9781484382073.002.A003
Sources: Royal Monetary Authority and staff estimates.6. Under the baseline scenario, each debt indicator breaches its indicative threshold. The breaches are large and will be sustained into the long run. It is important to note that the PV of debt indicators are higher than their nominal values because the loan portion of hydropower projects financed by India are not concessional. The total package—loan and grant—has a positive grant element.5 For example, the PV of debt-to-GDP ratio falls below threshold only after 2031 whereas the nominal debt-to-GDP ratio goes below the threshold in 2028. The profile of debt service indicators has worsened relative to the previous DSA, due to both higher debt service, and in the case of exports, a more moderate rate of growth.6
7. Volatility in the debt service indicators is due to a lumpy amortization schedule. Breaches in debt service indicators occur beyond the medium term and do not return to the threshold until the end of the projection horizon. This is in line with the repayment schedule for hydropower debt.
8. All five indicators breach their indicative threshold under stress tests. It is worth noting that although the ngultrum is pegged to the rupee, and nearly 80 percent of the debt stock is denominated in rupees, this does not preclude risks to the debt stock from an overvaluation of the ngultrum. As it stands, the ngultrum is only moderately overvalued (see External Sector Assessment in accompanying staff report), and risks remain contained given the projected improvement of the current account. Notwithstanding, efforts must remain vigilant to contain inflation near that of India.
Public DSA
9. Domestic debt is 6 percent of the debt stock in FY2017 and does not pose an additional risk to the debt profile. Movements in the public debt profile mirror those for external debt. As Bhutan relies less on grant financing and external concessional borrowing over the medium term, developing a deep and liquid domestic debt market will be important to meet financing needs going forward. To further this, the debt management office is preparing a Medium-Term Debt Strategy for FY2019–2023 and studying the possibility of issuance of longer term domestic instruments.
Conclusion
10. The current assessment remains broadly the same as the assessments made in the 2014 and 2016 Article IV DSAs, which assessed Bhutan’s debt at a moderate risk of debt distress. Even though under the baseline each indicator breaches its threshold, the unique mitigating factors discussed in detail in the last two DSAs remain valid and underpin our assessment. 77 percent of Bhutan’s external PPG debt is hydropower related, and most are hydropower projects constructed under the intergovernmental agreement in which the GoI covers both the financial and construction risks of these projects and buys surplus electricity at a price reflecting cost plus a 15 percent net return. Debt flows from these projects are projected to remain the bulk of the debt stock going forward. Risks stemming from non-hydropower debt are low, as the stock of non-hydropower debt-to-GDP is modest and owed mostly to the ADB and World Bank contracted on highly concessional terms.
11. The authorities agreed with staff’s assessment of a moderate risk of debt distress. They expect the electricity exports resulting from the commissioning of Mangdechhu (in FY2019), Puna II (in FY2021), and Puna I (in FY2023) will reverse the current account deficit by the end of the medium term. The authorities acknowledged that debt levels are high but that debt vulnerabilities are contained as financing is secured through the intergovernmental agreement with the GoI.
Bhutan: Indicators of Public and Publicly Guaranteed External Debt Under Alternative Scenarios, 2018–2038 1/
Citation: IMF Staff Country Reports 2018, 300; 10.5089/9781484382073.002.A003
Sources: Country authorities; and staff estimates and projections.1/ The most extreme stress test is the test that yields the highest ratio on or before 2028. In figure b. it corresponds to a One-time depreciation shock; in c. to a Exports shock; in d. to a One-time depreciation shock; in e. to a Exports shock and in figure f. to a One-time depreciation shockBhutan: Indicators of Public Debt Under Alternative Scenarios, 2018–2038 1/
Citation: IMF Staff Country Reports 2018, 300; 10.5089/9781484382073.002.A003
Sources: Country authorities; and staff estimates and projections.1/ The most extreme stress test is the test that yields the highest ratio on or before 2028.2/ Revenues are defined inclusive of grants.Bhutan: External Debt Sustainability Framework, Baseline Scenario, 2015–2038 1/
(In percent of GDP, unless otherwise indicated)
Includes both public and private sector external debt.
Derived as [r − g − p(1+g)]/(1+g+p+gp) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and p = growth rate of GDP deflator in U.S. dollarterms.
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 PVof 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 PVof new debt).
Bhutan: External Debt Sustainability Framework, Baseline Scenario, 2015–2038 1/
(In percent of GDP, unless otherwise indicated)
| Actual | Historical Average 6/ | Standard Deviation 6/ | Projections | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2018–2023 Average | 2028 | 2038 | 2024–2038 Average | ||||||
| External debt (nominal) 1/ | 94.0 | 110.9 | 100.0 | 96.2 | 99.7 | 103.2 | 98.8 | 90.1 | 79.6 | 38.4 | 3.9 | |||||||
| of which: public and publicly guaranteed (PPG) | 94.0 | 110.9 | 100.0 | 96.2 | 99.7 | 103.2 | 98.8 | 90.1 | 79.6 | 38.4 | 3.9 | |||||||
| Change in external debt | 0.4 | 16.9 | −10.9 | −3.9 | 3.5 | 3.5 | −4.4 | −8.7 | −10.5 | −6.6 | −0.8 | |||||||
| Identified net debt-creating flows | 18.6 | 25.1 | 10.0 | 16.3 | 9.4 | 3.2 | 0.7 | −3.5 | −9.4 | −7.6 | −4.6 | |||||||
| Non-interest current account deficit | 26.3 | 27.7 | 21.2 | 19.7 | 8.6 | 21.2 | 13.6 | 7.8 | 4.5 | 0.7 | −7.1 | −9.5 | −4.3 | −7.4 | ||||
| Deficit in balance of goods and services | 21.2 | 25.5 | 19.5 | 17.5 | 8.0 | 5.2 | 3.7 | 0.8 | −5.3 | −6.0 | −3.9 | |||||||
| Exports | 28.6 | 23.3 | 23.1 | 21.8 | 25.2 | 26.4 | 25.9 | 27.5 | 32.5 | 27.6 | 15.3 | |||||||
| Imports | 49.8 | 48.8 | 42.6 | 39.3 | 33.2 | 31.6 | 29.6 | 28.4 | 27.1 | 21.5 | 11.5 | |||||||
| Net currenttransfers (negative = inflow) | −4.0 | −6.8 | −7.3 | −6.5 | 2.4 | −4.6 | −2.1 | −2.5 | −2.6 | −2.3 | −1.9 | −1.5 | −1.1 | −1.4 | ||||
| of which: official | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||
| Other current account flows (negative = net inflow) | 9.2 | 8.9 | 9.0 | 8.3 | 7.7 | 5.2 | 3.3 | 2.2 | 0.1 | −1.9 | 0.7 | |||||||
| Net FDI (negative = inflow) | −0.5 | −0.4 | 0.5 | −1.3 | 1.5 | −1.1 | −1.2 | −1.5 | −1.0 | −0.4 | −0.4 | −0.4 | −0.5 | −0.4 | ||||
| Endogenous debt dynamics 2/ | −7.2 | −2.2 | −11.7 | −3.8 | −2.9 | −3.1 | −2.8 | −3.8 | −1.9 | 2.3 | 0.2 | |||||||
| Contribution from nominal interest rate | 1.9 | 1.7 | 1.6 | 1.5 | 1.4 | 2.8 | 2.9 | 2.8 | 4.3 | 4.8 | 0.5 | |||||||
| Contribution from real GDP growth | −5.2 | −6.6 | −7.2 | −5.3 | −4.3 | −5.9 | −5.8 | −6.5 | −6.2 | −2.5 | −0.3 | |||||||
| Contribution from price and exchange rate changes | −3.9 | 2.6 | −6.1 | … | … | … | … | … | … | … | … | … | ||||||
| Residual (3–4) 3/ | −18.3 | −8.2 | −20.9 | −20.1 | −5.9 | 0.3 | −5.1 | −5.2 | −1.1 | 1.0 | 3.8 | |||||||
| of which: exceptional financing | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||
| PV of external debt 4/ | … | … | 148.7 | 144.9 | 148.2 | 151.8 | 148.4 | 139.3 | 126.5 | 64.8 | 6.5 | |||||||
| In percent of exports | … | … | 644.4 | 664.5 | 587.6 | 574.1 | 572.6 | 506.0 | 389.6 | 234.9 | 42.6 | |||||||
| PV of PPG external debt | … | … | 148.7 | 144.9 | 148.2 | 151.8 | 148.4 | 139.3 | 126.5 | 64.8 | 6.5 | |||||||
| In percent of exports | … | … | 644.4 | 664.5 | 587.6 | 574.1 | 572.6 | 506.0 | 389.6 | 234.9 | 42.6 | |||||||
| In percent of government revenues | … | … | 799.0 | 683.1 | 761.6 | 716.8 | 734.7 | 687.3 | 531.0 | 307.5 | 27.2 | |||||||
| Debt service-to-exports ratio (in percent) | 22.8 | 18.7 | 33.3 | 38.0 | 9.9 | 18.0 | 26.6 | 17.5 | 22.7 | 31.4 | 11.5 | |||||||
| PPG debt service-to-exports ratio (in percent) | 22.8 | 18.7 | 33.3 | 38.0 | 9.9 | 18.0 | 26.6 | 17.5 | 22.7 | 31.4 | 11.5 | |||||||
| PPG debt service-to-revenue ratio (in percent) | 31.2 | 22.6 | 41.3 | 39.1 | 12.8 | 22.5 | 34.1 | 23.7 | 30.9 | 41.1 | 7.4 | |||||||
| Total gross financing need (Billions of U.S. dollars) | 0.7 | 0.7 | 0.8 | 0.7 | 0.4 | 0.3 | 0.3 | 0.2 | 0.0 | −0.1 | −0.4 | |||||||
| Non-interest current account deficit that stabilizes debt ratio | 26.0 | 10.8 | 32.1 | 25.0 | 10.0 | 4.3 | 8.9 | 9.4 | 3.4 | −2.9 | −3.5 | |||||||
| Key macroeconomic assumptions | ||||||||||||||||||
| Real GDP growth (in percent) | 6.2 | 7.3 | 7.4 | 7.0 | 2.4 | 5.8 | 4.8 | 6.3 | 6.0 | 7.2 | 7.5 | 6.3 | 6.0 | 7.3 | 6.2 | |||
| GDP deflator in US dollarterms (change in percent) | 4.4 | −2.7 | 5.8 | 2.1 | 7.8 | 3.1 | 3.2 | 0.7 | 1.6 | 1.8 | 1.8 | 2.0 | 1.8 | 1.8 | 1.8 | |||
| Effective interest rate (percent) 5/ | 2.3 | 1.9 | 1.6 | 3.7 | 1.4 | 1.7 | 1.6 | 3.0 | 3.1 | 3.1 | 5.2 | 2.9 | 11.6 | 11.5 | 14.6 | |||
| Growth of exports of G&S (US dollarterms, in percent) | 8.4 | −15.0 | 12.6 | 0.5 | 13.4 | 3.0 | 25.2 | 12.3 | 5.6 | 15.9 | 29.0 | 15.2 | 2.5 | 3.3 | 2.9 | |||
| Growth of imports of G&S (US dollarterms, in percent) | 8.8 | 2.4 | −0.9 | 9.0 | 19.7 | 0.8 | −8.7 | 2.0 | 1.1 | 4.4 | 4.6 | 0.7 | 2.7 | −1.2 | 2.1 | |||
| Grant element of new public sector borrowing (in percent) | … | … | … | … | … | 13.0 | 15.4 | 18.8 | 13.5 | 21.6 | 49.4 | 22.0 | 33.1 | 28.1 | 33.6 | |||
| Government revenues (excluding grants, in percent of GDP) | 20.9 | 19.3 | 18.6 | 21.2 | 19.5 | 21.2 | 20.2 | 20.3 | 23.8 | 21.0 | 21.1 | 24.0 | 22.9 | |||||
| Aid flows (in Billions of US dollars) 7/ | 2.0 | 2.4 | 2.7 | 0.3 | 0.2 | 0.3 | 0.3 | 0.2 | 0.1 | 0.2 | 0.1 | 0.1 | 0.1 | |||||
| of which: Grants | 0.2 | 0.2 | 0.2 | 0.3 | 0.1 | 0.2 | 0.3 | 0.2 | 0.1 | 0.2 | 0.1 | 0.0 | 0.0 | |||||
| of which: Concessional loans | 1.9 | 2.2 | 2.5 | 0.0 | 0.1 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | |||||
| Grant-equivalent financing (in percent of GDP) 8/ | … | … | … | 11.4 | 4.5 | 8.8 | 8.5 | 6.4 | 2.9 | 7.1 | 1.2 | 0.5 | 0.9 | |||||
| Grant-equivalent financing (in percent of external financing) 8/ | … | … | … | 53.5 | 30.3 | 51.6 | 66.9 | 83.2 | 93.8 | 63.2 | 73.9 | 41.9 | 61.9 | |||||
| Memorandum items: | ||||||||||||||||||
| Nominal GDP (Billions of US dollars) | 2.0 | 2.1 | 2.4 | 2.6 | 2.8 | 3.0 | 3.3 | 3.6 | 3.9 | 5.7 | 12.5 | |||||||
| Nominal dollar GDP growth | 10.8 | 4.4 | 13.6 | 9.1 | 8.2 | 7.1 | 7.8 | 9.1 | 9.4 | 8.4 | 7.9 | 9.2 | 8.1 | |||||
| PV of PPG external debt (in Billions of US dollars) | 3.7 | 3.9 | 4.3 | 4.7 | 4.8 | 4.9 | 4.9 | 3.7 | 0.8 | |||||||||
| (PVt-PVt-1)/GDPt-1 (in percent) | 9.7 | 15.9 | 11.4 | 4.8 | 3.5 | −1.0 | 7.4 | −5.2 | −0.8 | −4.3 | ||||||||
| Gross workers’ remittances (Billions of US dollars) | … | … | … | … | … | … | … | … | … | … | … | |||||||
| PV of PPG external debt (in percent of GDP + remittances) | … | … | 148.7 | 144.9 | 148.2 | 151.8 | 148.4 | 139.3 | 126.5 | 64.8 | 6.5 | |||||||
| PV of PPG external debt (in percent of exports + remittances) | … | … | 644.4 | 664.5 | 587.6 | 574.1 | 572.6 | 506.0 | 389.6 | 234.9 | 42.6 | |||||||
| Debt service of PPG external debt (in percent of exports + remittances) | … | … | 33.3 | 38.0 | 9.9 | 18.0 | 26.6 | 17.5 | 22.7 | 31.4 | 11.5 | |||||||
Includes both public and private sector external debt.
Derived as [r − g − p(1+g)]/(1+g+p+gp) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and p = growth rate of GDP deflator in U.S. dollarterms.
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 PVof 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 PVof new debt).
Bhutan: External Debt Sustainability Framework, Baseline Scenario, 2015–2038 1/
(In percent of GDP, unless otherwise indicated)
| Actual | Historical Average 6/ | Standard Deviation 6/ | Projections | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2018–2023 Average | 2028 | 2038 | 2024–2038 Average | ||||||
| External debt (nominal) 1/ | 94.0 | 110.9 | 100.0 | 96.2 | 99.7 | 103.2 | 98.8 | 90.1 | 79.6 | 38.4 | 3.9 | |||||||
| of which: public and publicly guaranteed (PPG) | 94.0 | 110.9 | 100.0 | 96.2 | 99.7 | 103.2 | 98.8 | 90.1 | 79.6 | 38.4 | 3.9 | |||||||
| Change in external debt | 0.4 | 16.9 | −10.9 | −3.9 | 3.5 | 3.5 | −4.4 | −8.7 | −10.5 | −6.6 | −0.8 | |||||||
| Identified net debt-creating flows | 18.6 | 25.1 | 10.0 | 16.3 | 9.4 | 3.2 | 0.7 | −3.5 | −9.4 | −7.6 | −4.6 | |||||||
| Non-interest current account deficit | 26.3 | 27.7 | 21.2 | 19.7 | 8.6 | 21.2 | 13.6 | 7.8 | 4.5 | 0.7 | −7.1 | −9.5 | −4.3 | −7.4 | ||||
| Deficit in balance of goods and services | 21.2 | 25.5 | 19.5 | 17.5 | 8.0 | 5.2 | 3.7 | 0.8 | −5.3 | −6.0 | −3.9 | |||||||
| Exports | 28.6 | 23.3 | 23.1 | 21.8 | 25.2 | 26.4 | 25.9 | 27.5 | 32.5 | 27.6 | 15.3 | |||||||
| Imports | 49.8 | 48.8 | 42.6 | 39.3 | 33.2 | 31.6 | 29.6 | 28.4 | 27.1 | 21.5 | 11.5 | |||||||
| Net currenttransfers (negative = inflow) | −4.0 | −6.8 | −7.3 | −6.5 | 2.4 | −4.6 | −2.1 | −2.5 | −2.6 | −2.3 | −1.9 | −1.5 | −1.1 | −1.4 | ||||
| of which: official | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||
| Other current account flows (negative = net inflow) | 9.2 | 8.9 | 9.0 | 8.3 | 7.7 | 5.2 | 3.3 | 2.2 | 0.1 | −1.9 | 0.7 | |||||||
| Net FDI (negative = inflow) | −0.5 | −0.4 | 0.5 | −1.3 | 1.5 | −1.1 | −1.2 | −1.5 | −1.0 | −0.4 | −0.4 | −0.4 | −0.5 | −0.4 | ||||
| Endogenous debt dynamics 2/ | −7.2 | −2.2 | −11.7 | −3.8 | −2.9 | −3.1 | −2.8 | −3.8 | −1.9 | 2.3 | 0.2 | |||||||
| Contribution from nominal interest rate | 1.9 | 1.7 | 1.6 | 1.5 | 1.4 | 2.8 | 2.9 | 2.8 | 4.3 | 4.8 | 0.5 | |||||||
| Contribution from real GDP growth | −5.2 | −6.6 | −7.2 | −5.3 | −4.3 | −5.9 | −5.8 | −6.5 | −6.2 | −2.5 | −0.3 | |||||||
| Contribution from price and exchange rate changes | −3.9 | 2.6 | −6.1 | … | … | … | … | … | … | … | … | … | ||||||
| Residual (3–4) 3/ | −18.3 | −8.2 | −20.9 | −20.1 | −5.9 | 0.3 | −5.1 | −5.2 | −1.1 | 1.0 | 3.8 | |||||||
| of which: exceptional financing | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||
| PV of external debt 4/ | … | … | 148.7 | 144.9 | 148.2 | 151.8 | 148.4 | 139.3 | 126.5 | 64.8 | 6.5 | |||||||
| In percent of exports | … | … | 644.4 | 664.5 | 587.6 | 574.1 | 572.6 | 506.0 | 389.6 | 234.9 | 42.6 | |||||||
| PV of PPG external debt | … | … | 148.7 | 144.9 | 148.2 | 151.8 | 148.4 | 139.3 | 126.5 | 64.8 | 6.5 | |||||||
| In percent of exports | … | … | 644.4 | 664.5 | 587.6 | 574.1 | 572.6 | 506.0 | 389.6 | 234.9 | 42.6 | |||||||
| In percent of government revenues | … | … | 799.0 | 683.1 | 761.6 | 716.8 | 734.7 | 687.3 | 531.0 | 307.5 | 27.2 | |||||||
| Debt service-to-exports ratio (in percent) | 22.8 | 18.7 | 33.3 | 38.0 | 9.9 | 18.0 | 26.6 | 17.5 | 22.7 | 31.4 | 11.5 | |||||||
| PPG debt service-to-exports ratio (in percent) | 22.8 | 18.7 | 33.3 | 38.0 | 9.9 | 18.0 | 26.6 | 17.5 | 22.7 | 31.4 | 11.5 | |||||||
| PPG debt service-to-revenue ratio (in percent) | 31.2 | 22.6 | 41.3 | 39.1 | 12.8 | 22.5 | 34.1 | 23.7 | 30.9 | 41.1 | 7.4 | |||||||
| Total gross financing need (Billions of U.S. dollars) | 0.7 | 0.7 | 0.8 | 0.7 | 0.4 | 0.3 | 0.3 | 0.2 | 0.0 | −0.1 | −0.4 | |||||||
| Non-interest current account deficit that stabilizes debt ratio | 26.0 | 10.8 | 32.1 | 25.0 | 10.0 | 4.3 | 8.9 | 9.4 | 3.4 | −2.9 | −3.5 | |||||||
| Key macroeconomic assumptions | ||||||||||||||||||
| Real GDP growth (in percent) | 6.2 | 7.3 | 7.4 | 7.0 | 2.4 | 5.8 | 4.8 | 6.3 | 6.0 | 7.2 | 7.5 | 6.3 | 6.0 | 7.3 | 6.2 | |||
| GDP deflator in US dollarterms (change in percent) | 4.4 | −2.7 | 5.8 | 2.1 | 7.8 | 3.1 | 3.2 | 0.7 | 1.6 | 1.8 | 1.8 | 2.0 | 1.8 | 1.8 | 1.8 | |||
| Effective interest rate (percent) 5/ | 2.3 | 1.9 | 1.6 | 3.7 | 1.4 | 1.7 | 1.6 | 3.0 | 3.1 | 3.1 | 5.2 | 2.9 | 11.6 | 11.5 | 14.6 | |||
| Growth of exports of G&S (US dollarterms, in percent) | 8.4 | −15.0 | 12.6 | 0.5 | 13.4 | 3.0 | 25.2 | 12.3 | 5.6 | 15.9 | 29.0 | 15.2 | 2.5 | 3.3 | 2.9 | |||
| Growth of imports of G&S (US dollarterms, in percent) | 8.8 | 2.4 | −0.9 | 9.0 | 19.7 | 0.8 | −8.7 | 2.0 | 1.1 | 4.4 | 4.6 | 0.7 | 2.7 | −1.2 | 2.1 | |||
| Grant element of new public sector borrowing (in percent) | … | … | … | … | … | 13.0 | 15.4 | 18.8 | 13.5 | 21.6 | 49.4 | 22.0 | 33.1 | 28.1 | 33.6 | |||
| Government revenues (excluding grants, in percent of GDP) | 20.9 | 19.3 | 18.6 | 21.2 | 19.5 | 21.2 | 20.2 | 20.3 | 23.8 | 21.0 | 21.1 | 24.0 | 22.9 | |||||
| Aid flows (in Billions of US dollars) 7/ | 2.0 | 2.4 | 2.7 | 0.3 | 0.2 | 0.3 | 0.3 | 0.2 | 0.1 | 0.2 | 0.1 | 0.1 | 0.1 | |||||
| of which: Grants | 0.2 | 0.2 | 0.2 | 0.3 | 0.1 | 0.2 | 0.3 | 0.2 | 0.1 | 0.2 | 0.1 | 0.0 | 0.0 | |||||
| of which: Concessional loans | 1.9 | 2.2 | 2.5 | 0.0 | 0.1 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | |||||
| Grant-equivalent financing (in percent of GDP) 8/ | … | … | … | 11.4 | 4.5 | 8.8 | 8.5 | 6.4 | 2.9 | 7.1 | 1.2 | 0.5 | 0.9 | |||||
| Grant-equivalent financing (in percent of external financing) 8/ | … | … | … | 53.5 | 30.3 | 51.6 | 66.9 | 83.2 | 93.8 | 63.2 | 73.9 | 41.9 | 61.9 | |||||
| Memorandum items: | ||||||||||||||||||
| Nominal GDP (Billions of US dollars) | 2.0 | 2.1 | 2.4 | 2.6 | 2.8 | 3.0 | 3.3 | 3.6 | 3.9 | 5.7 | 12.5 | |||||||
| Nominal dollar GDP growth | 10.8 | 4.4 | 13.6 | 9.1 | 8.2 | 7.1 | 7.8 | 9.1 | 9.4 | 8.4 | 7.9 | 9.2 | 8.1 | |||||
| PV of PPG external debt (in Billions of US dollars) | 3.7 | 3.9 | 4.3 | 4.7 | 4.8 | 4.9 | 4.9 | 3.7 | 0.8 | |||||||||
| (PVt-PVt-1)/GDPt-1 (in percent) | 9.7 | 15.9 | 11.4 | 4.8 | 3.5 | −1.0 | 7.4 | −5.2 | −0.8 | −4.3 | ||||||||
| Gross workers’ remittances (Billions of US dollars) | … | … | … | … | … | … | … | … | … | … | … | |||||||
| PV of PPG external debt (in percent of GDP + remittances) | … | … | 148.7 | 144.9 | 148.2 | 151.8 | 148.4 | 139.3 | 126.5 | 64.8 | 6.5 | |||||||
| PV of PPG external debt (in percent of exports + remittances) | … | … | 644.4 | 664.5 | 587.6 | 574.1 | 572.6 | 506.0 | 389.6 | 234.9 | 42.6 | |||||||
| Debt service of PPG external debt (in percent of exports + remittances) | … | … | 33.3 | 38.0 | 9.9 | 18.0 | 26.6 | 17.5 | 22.7 | 31.4 | 11.5 | |||||||
Includes both public and private sector external debt.
Derived as [r − g − p(1+g)]/(1+g+p+gp) times previous period debt ratio, with r = nominal interest rate; g = real GDP growth rate, and p = growth rate of GDP deflator in U.S. dollarterms.
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 PVof 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 PVof new debt).
Bhutan: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2018–2038
(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
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 1 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.
Bhutan: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2018–2038
(In percent)
| Projections | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2028 | 2038 | |
| PV of debt-to GDP ratio | ||||||||
| Baseline | 145 | 148 | 152 | 148 | 139 | 126 | 65 | 7 |
| A. Alternative Scenarios | ||||||||
| A1. Key variables at their historical averages in 2018–2038 1/ | 145 | 152 | 162 | 169 | 173 | 180 | 211 | 209 |
| A2. New public sector loans on less favorable terms in 2018–2038 2 | 145 | 156 | 159 | 153 | 144 | 131 | 71 | 14 |
| B. Bound Tests | ||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2019–2020 | 145 | 153 | 156 | 149 | 140 | 127 | 65 | 6 |
| B2. Export value growth at historical average minus one standard deviation in 2019–2020 3/ | 145 | 159 | 169 | 162 | 152 | 139 | 73 | 9 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2019–2020 | 145 | 167 | 179 | 172 | 161 | 146 | 75 | 7 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2019–2020 4/ | 145 | 152 | 153 | 146 | 137 | 125 | 64 | 6 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 145 | 162 | 175 | 168 | 158 | 144 | 75 | 8 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2019 5/ | 145 | 215 | 216 | 207 | 194 | 176 | 90 | 9 |
| PV of debt-to-exports ratio | ||||||||
| Baseline | 665 | 588 | 574 | 573 | 506 | 390 | 235 | 43 |
| A. Alternative Scenarios | ||||||||
| A1. Key variables at their historical averages in 2018–2038 1/ | 665 | 601 | 613 | 651 | 629 | 555 | 764 | 1363 |
| A2. New public sector loans on less favorable terms in 2018–2038 2 | 665 | 617 | 600 | 591 | 524 | 405 | 256 | 88 |
| B. Bound Tests | ||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2019–2020 | 665 | 606 | 580 | 566 | 500 | 385 | 231 | 41 |
| B2. Export value growth at historical average minus one standard deviation in 2019–2020 3/ | 665 | 906 | 1187 | 1160 | 1026 | 794 | 493 | 106 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2019–2020 | 665 | 606 | 580 | 566 | 500 | 385 | 231 | 41 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2019–2020 4/ | 665 | 604 | 579 | 565 | 499 | 384 | 231 | 40 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 665 | 826 | 988 | 965 | 854 | 659 | 405 | 82 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2019 5/ | 665 | 606 | 580 | 566 | 500 | 385 | 231 | 41 |
| PV of debt-to-revenue ratio | ||||||||
| Baseline | 683 | 762 | 717 | 735 | 687 | 531 | 307 | 27 |
| A. Alternative Scenarios | ||||||||
| A1. Key variables at their historical averages in 2018–2038 1/ | 683 | 779 | 765 | 835 | 855 | 757 | 1000 | 871 |
| A2. New public sector loans on less favorable terms in 2018–2038 2 | 683 | 800 | 749 | 758 | 712 | 552 | 335 | 56 |
| B. Bound Tests | ||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2019–2020 | 683 | 786 | 737 | 739 | 691 | 534 | 308 | 26 |
| B2. Export value growth at historical average minus one standard deviation in 2019–2020 3/ | 683 | 817 | 799 | 803 | 752 | 584 | 348 | 37 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2019–2020 | 683 | 859 | 847 | 849 | 794 | 613 | 354 | 30 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2019–2020 4/ | 683 | 783 | 723 | 725 | 678 | 524 | 302 | 26 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 683 | 835 | 828 | 831 | 778 | 603 | 356 | 35 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2019 5/ | 683 | 1107 | 1021 | 1024 | 958 | 740 | 426 | 37 |
| Debt service-to-exports ratio | ||||||||
| Baseline | 38 | 10 | 18 | 27 | 17 | 23 | 31 | 12 |
| A. Alternative Scenarios | ||||||||
| A1. Key variables at their historical averages in 2018–2038 1/ | 38 | 10 | 18 | 27 | 20 | 26 | 51 | 105 |
| A2. New public sector loans on less favorable terms in 2018–2038 2 | 38 | 10 | 17 | 26 | 18 | 23 | 33 | 11 |
| B. Bound Tests | ||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2019–2020 | 38 | 10 | 18 | 27 | 17 | 23 | 31 | 11 |
| B2. Export value growth at historical average minus one standard deviation in 2019–2020 3/ | 38 | 14 | 35 | 53 | 36 | 45 | 65 | 27 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2019–2020 | 38 | 10 | 18 | 27 | 17 | 23 | 31 | 11 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2019–2020 4/ | 38 | 10 | 18 | 27 | 17 | 23 | 31 | 11 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 38 | 13 | 29 | 45 | 30 | 38 | 54 | 21 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2019 5/ | 38 | 10 | 18 | 27 | 17 | 23 | 31 | 11 |
| Debt service-to-revenue ratio | ||||||||
| Baseline | 39 | 13 | 22 | 34 | 24 | 31 | 41 | 7 |
| A. Alternative Scenarios | ||||||||
| A1. Key variables at their historical averages in 2018–2038 1/ | 39 | 13 | 23 | 35 | 27 | 35 | 66 | 67 |
| A2. New public sector loans on less favorable terms in 2018–2038 2 | 39 | 13 | 21 | 34 | 24 | 31 | 43 | 7 |
| B. Bound Tests | ||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2019–2020 | 39 | 13 | 23 | 35 | 24 | 31 | 42 | 7 |
| B2. Export value growth at historical average minus one standard deviation in 2019–2020 3/ | 39 | 13 | 23 | 37 | 26 | 33 | 46 | 9 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2019–2020 | 39 | 14 | 26 | 40 | 28 | 36 | 48 | 8 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2019–2020 4/ | 39 | 13 | 22 | 34 | 24 | 31 | 41 | 7 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 39 | 13 | 25 | 38 | 27 | 35 | 47 | 9 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2019 5/ | 39 | 18 | 32 | 48 | 33 | 44 | 58 | 10 |
| Memorandum item: | ||||||||
| Grant element assumed on residual financing (i.e., financing required above baseline) 6/ | 19 | 19 | 19 | 19 | 19 | 19 | 19 | 19 |
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
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 1 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.
Bhutan: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2018–2038
(In percent)
| Projections | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2028 | 2038 | |
| PV of debt-to GDP ratio | ||||||||
| Baseline | 145 | 148 | 152 | 148 | 139 | 126 | 65 | 7 |
| A. Alternative Scenarios | ||||||||
| A1. Key variables at their historical averages in 2018–2038 1/ | 145 | 152 | 162 | 169 | 173 | 180 | 211 | 209 |
| A2. New public sector loans on less favorable terms in 2018–2038 2 | 145 | 156 | 159 | 153 | 144 | 131 | 71 | 14 |
| B. Bound Tests | ||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2019–2020 | 145 | 153 | 156 | 149 | 140 | 127 | 65 | 6 |
| B2. Export value growth at historical average minus one standard deviation in 2019–2020 3/ | 145 | 159 | 169 | 162 | 152 | 139 | 73 | 9 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2019–2020 | 145 | 167 | 179 | 172 | 161 | 146 | 75 | 7 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2019–2020 4/ | 145 | 152 | 153 | 146 | 137 | 125 | 64 | 6 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 145 | 162 | 175 | 168 | 158 | 144 | 75 | 8 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2019 5/ | 145 | 215 | 216 | 207 | 194 | 176 | 90 | 9 |
| PV of debt-to-exports ratio | ||||||||
| Baseline | 665 | 588 | 574 | 573 | 506 | 390 | 235 | 43 |
| A. Alternative Scenarios | ||||||||
| A1. Key variables at their historical averages in 2018–2038 1/ | 665 | 601 | 613 | 651 | 629 | 555 | 764 | 1363 |
| A2. New public sector loans on less favorable terms in 2018–2038 2 | 665 | 617 | 600 | 591 | 524 | 405 | 256 | 88 |
| B. Bound Tests | ||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2019–2020 | 665 | 606 | 580 | 566 | 500 | 385 | 231 | 41 |
| B2. Export value growth at historical average minus one standard deviation in 2019–2020 3/ | 665 | 906 | 1187 | 1160 | 1026 | 794 | 493 | 106 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2019–2020 | 665 | 606 | 580 | 566 | 500 | 385 | 231 | 41 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2019–2020 4/ | 665 | 604 | 579 | 565 | 499 | 384 | 231 | 40 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 665 | 826 | 988 | 965 | 854 | 659 | 405 | 82 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2019 5/ | 665 | 606 | 580 | 566 | 500 | 385 | 231 | 41 |
| PV of debt-to-revenue ratio | ||||||||
| Baseline | 683 | 762 | 717 | 735 | 687 | 531 | 307 | 27 |
| A. Alternative Scenarios | ||||||||
| A1. Key variables at their historical averages in 2018–2038 1/ | 683 | 779 | 765 | 835 | 855 | 757 | 1000 | 871 |
| A2. New public sector loans on less favorable terms in 2018–2038 2 | 683 | 800 | 749 | 758 | 712 | 552 | 335 | 56 |
| B. Bound Tests | ||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2019–2020 | 683 | 786 | 737 | 739 | 691 | 534 | 308 | 26 |
| B2. Export value growth at historical average minus one standard deviation in 2019–2020 3/ | 683 | 817 | 799 | 803 | 752 | 584 | 348 | 37 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2019–2020 | 683 | 859 | 847 | 849 | 794 | 613 | 354 | 30 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2019–2020 4/ | 683 | 783 | 723 | 725 | 678 | 524 | 302 | 26 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 683 | 835 | 828 | 831 | 778 | 603 | 356 | 35 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2019 5/ | 683 | 1107 | 1021 | 1024 | 958 | 740 | 426 | 37 |
| Debt service-to-exports ratio | ||||||||
| Baseline | 38 | 10 | 18 | 27 | 17 | 23 | 31 | 12 |
| A. Alternative Scenarios | ||||||||
| A1. Key variables at their historical averages in 2018–2038 1/ | 38 | 10 | 18 | 27 | 20 | 26 | 51 | 105 |
| A2. New public sector loans on less favorable terms in 2018–2038 2 | 38 | 10 | 17 | 26 | 18 | 23 | 33 | 11 |
| B. Bound Tests | ||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2019–2020 | 38 | 10 | 18 | 27 | 17 | 23 | 31 | 11 |
| B2. Export value growth at historical average minus one standard deviation in 2019–2020 3/ | 38 | 14 | 35 | 53 | 36 | 45 | 65 | 27 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2019–2020 | 38 | 10 | 18 | 27 | 17 | 23 | 31 | 11 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2019–2020 4/ | 38 | 10 | 18 | 27 | 17 | 23 | 31 | 11 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 38 | 13 | 29 | 45 | 30 | 38 | 54 | 21 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2019 5/ | 38 | 10 | 18 | 27 | 17 | 23 | 31 | 11 |
| Debt service-to-revenue ratio | ||||||||
| Baseline | 39 | 13 | 22 | 34 | 24 | 31 | 41 | 7 |
| A. Alternative Scenarios | ||||||||
| A1. Key variables at their historical averages in 2018–2038 1/ | 39 | 13 | 23 | 35 | 27 | 35 | 66 | 67 |
| A2. New public sector loans on less favorable terms in 2018–2038 2 | 39 | 13 | 21 | 34 | 24 | 31 | 43 | 7 |
| B. Bound Tests | ||||||||
| B1. Real GDP growth at historical average minus one standard deviation in 2019–2020 | 39 | 13 | 23 | 35 | 24 | 31 | 42 | 7 |
| B2. Export value growth at historical average minus one standard deviation in 2019–2020 3/ | 39 | 13 | 23 | 37 | 26 | 33 | 46 | 9 |
| B3. US dollar GDP deflator at historical average minus one standard deviation in 2019–2020 | 39 | 14 | 26 | 40 | 28 | 36 | 48 | 8 |
| B4. Net non-debt creating flows at historical average minus one standard deviation in 2019–2020 4/ | 39 | 13 | 22 | 34 | 24 | 31 | 41 | 7 |
| B5. Combination of B1-B4 using one-half standard deviation shocks | 39 | 13 | 25 | 38 | 27 | 35 | 47 | 9 |
| B6. One-time 30 percent nominal depreciation relative to the baseline in 2019 5/ | 39 | 18 | 32 | 48 | 33 | 44 | 58 | 10 |
| Memorandum item: | ||||||||
| Grant element assumed on residual financing (i.e., financing required above baseline) 6/ | 19 | 19 | 19 | 19 | 19 | 19 | 19 | 19 |
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
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 1 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.
Bhutan: Public Sector Debt Sustainability Framework, Baseline Scenario, 2015–2038
(In percent of GDP, unless otherwise indicated)
Gross government debt including hydro-related liabilities.
Gross financing need is defined as the primary deficit plus debt service plus the stock of short-term debt at the end of 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 overthe past 10years, subject to data availability.
Bhutan: Public Sector Debt Sustainability Framework, Baseline Scenario, 2015–2038
(In percent of GDP, unless otherwise indicated)
| Actual | Average 5/ | Standard Deviation 5/ | Estimate | Projections | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2018–23 Average | 2028 | 2038 | 2024–38 Average | ||||||
| Public sector debt 1/ | 95.7 | 114.2 | 106.3 | 102.7 | 103.9 | 107.4 | 104.6 | 95.8 | 82.8 | 66.3 | 39.5 | |||||||
| of which: foreign-currency denominated | 94.0 | 110.9 | 100.0 | 96.2 | 99.7 | 103.2 | 98.8 | 90.1 | 79.6 | 38.4 | 3.9 | |||||||
| Change in public sector debt | −0.6 | 18.5 | −7.9 | −3.6 | 1.2 | 3.5 | −2.8 | −8.8 | −13.1 | −1.8 | −2.4 | |||||||
| Identified debt-creating flows | −6.6 | −3.7 | −15.0 | −8.0 | −10.0 | −4.6 | −5.4 | −9.9 | −12.9 | −1.1 | −2.3 | |||||||
| Primary deficit | −3.5 | −0.7 | 1.7 | −2.3 | 2.7 | −0.7 | −3.8 | −2.5 | −2.9 | −4.1 | −9.1 | −3.8 | −1.6 | −0.3 | −22 | |||
| Revenue and grants | 28.8 | 29.9 | 26.7 | 31.1 | 22.1 | 28.1 | 28.0 | 26.3 | 26.6 | 22.1 | 24.2 | |||||||
| of which: grants | 7.9 | 10.6 | 8.1 | 9.9 | 2.6 | 6.9 | 7.8 | 6.0 | 2.8 | 1.0 | 0.2 | |||||||
| Primary (noninterest) expenditure | 25.3 | 29.3 | 28.4 | 30.4 | 18.3 | 25.6 | 25.2 | 22.2 | 17.4 | 20.5 | 23.9 | |||||||
| Automatic debt dynamics | −3.0 | −3.0 | −16.7 | −7.3 | −6.3 | −2.1 | −2.5 | −5.8 | −3.8 | 0.5 | −1.9 | |||||||
| Contribution from interest rate/growth differential | −0.5 | −4.8 | −8.8 | −0.6 | −0.5 | −1.6 | −1.3 | −2.7 | −1.1 | 1.3 | −1.8 | |||||||
| of which: contribution from average real interest rate | 5.1 | 1.7 | −0.9 | 5.2 | 4.2 | 4.6 | 4.8 | 4.3 | 5.6 | 5.2 | 1.1 | |||||||
| of which: contribution from real GDP growth | −5.6 | −6.5 | −7.9 | −5.8 | −4.7 | −6.2 | −6.1 | −7.0 | −6.7 | −3.9 | −2.9 | |||||||
| Contribution from real exchange rate depreciation | −2.5 | 1.8 | −7.9 | −6.7 | −5.8 | −0.5 | −1.2 | −3.1 | −2.7 | … | … | |||||||
| Other identified debt-creating flows | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||
| Privatization receipts (negative) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||
| 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 | 6.0 | 22.2 | 7.2 | 4.4 | 11.2 | 8.1 | 2.6 | 1.1 | −0.2 | −0.7 | −0.2 | |||||||
| Other Sustainability Indicators | ||||||||||||||||||
| PV of public sector debt | 155.0 | 151.4 | 152.4 | 156.0 | 154.2 | 145.0 | 129.6 | 928 | 42.0 | |||||||||
| of which: foreign-currency denominated | … | … | 148.7 | 144.9 | 148.2 | 151.8 | 148.4 | 139.3 | 126.5 | 64.8 | 6.5 | |||||||
| of which: external | … | … | 148.7 | 144.9 | 148.2 | 151.8 | 148.4 | 139.3 | 126.5 | 64.8 | 6.5 | |||||||
| PV of contingent liabilities (not included in public sector debt) | … | … | … | … | … | … | … | … | … | … | … | |||||||
| Gross financing need 2/ | 3.2 | 3.9 | 13.6 | 7.7 | −1.1 | 2.5 | 4.2 | 1.0 | −1.5 | 8.3 | 3.4 | |||||||
| PV of public sector debt-to-revenue and grants ratio (in percent) | … | … | 579.7 | 486.9 | 690.6 | 556.1 | 550.1 | 551.9 | 487.9 | 420.2 | 173.8 | |||||||
| PVof public sector debt-to-revenue ratio (in percent) | … | … | 8328 | 714.1 | 783.3 | 736.8 | 763.6 | 715.5 | 544.3 | 440.2 | 175.4 | |||||||
| of which: external 3/ | … | … | 799.0 | 683.1 | 761.6 | 716.8 | 734.7 | 687.3 | 531.0 | 307.5 | 27.2 | |||||||
| Debt service-to-revenue and grants ratio (in percent) 4/ | 23.3 | 15.3 | 29.1 | 27.1 | 11.9 | 17.5 | 25.3 | 19.5 | 28.8 | 44.7 | 15.5 | |||||||
| Debt service-to-revenue ratio (in percent) 4/ | 32.1 | 23.7 | 41.8 | 39.8 | 13.5 | 23.2 | 35.1 | 25.2 | 32.1 | 46.8 | 15.7 | |||||||
| Primary deficit that stabilizes the debt-to-GDP ratio | −3.0 | −19.2 | 9.5 | 2.8 | −5.0 | −6.0 | −0.1 | 4.7 | 3.9 | 0.2 | 2.1 | |||||||
| Key macroeconomic and fiscal assumptions | ||||||||||||||||||
| Real GDP growth (in percent) | 6.2 | 7.3 | 7.4 | 7.0 | 2.4 | 5.8 | 4.8 | 6.3 | 6.0 | 7.2 | 7.5 | 6.3 | 6.0 | 7.3 | 6.2 | |||
| Average nominal interest rate on forexdebt (in percent) | 23 | 1.9 | 1.7 | 3.7 | 1.4 | 1.7 | 1.6 | 3.0 | 3.1 | 3.1 | 5.2 | 2.9 | 11.6 | 11.5 | 14.6 | |||
| Average real interest rate on domestic debt (in percent) | −3.6 | 1.4 | −24 | 0.0 | 3.7 | −1.7 | −2.0 | 0.1 | 1.3 | 1.3 | 1.3 | 0.1 | 1.3 | 1.6 | 1.5 | |||
| Real exchange rate depreciation (in percent, + indicates depreciatior | −27 | 2.0 | −7.7 | −0.4 | 7.2 | −6.7 | … | … | … | … | … | … | … | … | … | |||
| Inflation rate (GDP deflator, in percent) | 5.4 | 4.0 | 6.0 | 6.1 | 1.5 | 4.3 | 4.3 | 4.1 | 3.8 | 4.3 | 4.3 | 4.2 | 4.3 | 4.3 | 4.3 | |||
| Growth of real primary spending (deflated by GDP deflator, in percer | −1.4 | 24.4 | 4.2 | 2.7 | 7.7 | 13.0 | −36.8 | 48.7 | 4.3 | −5.6 | −15.5 | 1.4 | 7.7 | 9.3 | 8.5 | |||
| Grant element of new external borrowing (in percent) | … | … | … | … | … | 13.0 | 15.4 | 18.8 | 13.5 | 21.6 | 49.4 | 22.0 | 33.1 | 28.1 | … | |||
Gross government debt including hydro-related liabilities.
Gross financing need is defined as the primary deficit plus debt service plus the stock of short-term debt at the end of 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 overthe past 10years, subject to data availability.
Bhutan: Public Sector Debt Sustainability Framework, Baseline Scenario, 2015–2038
(In percent of GDP, unless otherwise indicated)
| Actual | Average 5/ | Standard Deviation 5/ | Estimate | Projections | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2018–23 Average | 2028 | 2038 | 2024–38 Average | ||||||
| Public sector debt 1/ | 95.7 | 114.2 | 106.3 | 102.7 | 103.9 | 107.4 | 104.6 | 95.8 | 82.8 | 66.3 | 39.5 | |||||||
| of which: foreign-currency denominated | 94.0 | 110.9 | 100.0 | 96.2 | 99.7 | 103.2 | 98.8 | 90.1 | 79.6 | 38.4 | 3.9 | |||||||
| Change in public sector debt | −0.6 | 18.5 | −7.9 | −3.6 | 1.2 | 3.5 | −2.8 | −8.8 | −13.1 | −1.8 | −2.4 | |||||||
| Identified debt-creating flows | −6.6 | −3.7 | −15.0 | −8.0 | −10.0 | −4.6 | −5.4 | −9.9 | −12.9 | −1.1 | −2.3 | |||||||
| Primary deficit | −3.5 | −0.7 | 1.7 | −2.3 | 2.7 | −0.7 | −3.8 | −2.5 | −2.9 | −4.1 | −9.1 | −3.8 | −1.6 | −0.3 | −22 | |||
| Revenue and grants | 28.8 | 29.9 | 26.7 | 31.1 | 22.1 | 28.1 | 28.0 | 26.3 | 26.6 | 22.1 | 24.2 | |||||||
| of which: grants | 7.9 | 10.6 | 8.1 | 9.9 | 2.6 | 6.9 | 7.8 | 6.0 | 2.8 | 1.0 | 0.2 | |||||||
| Primary (noninterest) expenditure | 25.3 | 29.3 | 28.4 | 30.4 | 18.3 | 25.6 | 25.2 | 22.2 | 17.4 | 20.5 | 23.9 | |||||||
| Automatic debt dynamics | −3.0 | −3.0 | −16.7 | −7.3 | −6.3 | −2.1 | −2.5 | −5.8 | −3.8 | 0.5 | −1.9 | |||||||
| Contribution from interest rate/growth differential | −0.5 | −4.8 | −8.8 | −0.6 | −0.5 | −1.6 | −1.3 | −2.7 | −1.1 | 1.3 | −1.8 | |||||||
| of which: contribution from average real interest rate | 5.1 | 1.7 | −0.9 | 5.2 | 4.2 | 4.6 | 4.8 | 4.3 | 5.6 | 5.2 | 1.1 | |||||||
| of which: contribution from real GDP growth | −5.6 | −6.5 | −7.9 | −5.8 | −4.7 | −6.2 | −6.1 | −7.0 | −6.7 | −3.9 | −2.9 | |||||||
| Contribution from real exchange rate depreciation | −2.5 | 1.8 | −7.9 | −6.7 | −5.8 | −0.5 | −1.2 | −3.1 | −2.7 | … | … | |||||||
| Other identified debt-creating flows | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||
| Privatization receipts (negative) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |||||||
| 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 | 6.0 | 22.2 | 7.2 | 4.4 | 11.2 | 8.1 | 2.6 | 1.1 | −0.2 | −0.7 | −0.2 | |||||||
| Other Sustainability Indicators | ||||||||||||||||||
| PV of public sector debt | 155.0 | 151.4 | 152.4 | 156.0 | 154.2 | 145.0 | 129.6 | 928 | 42.0 | |||||||||
| of which: foreign-currency denominated | … | … | 148.7 | 144.9 | 148.2 | 151.8 | 148.4 | 139.3 | 126.5 | 64.8 | 6.5 | |||||||
| of which: external | … | … | 148.7 | 144.9 | 148.2 | 151.8 | 148.4 | 139.3 | 126.5 | 64.8 | 6.5 | |||||||
| PV of contingent liabilities (not included in public sector debt) | … | … | … | … | … | … | … | … | … | … | … | |||||||
| Gross financing need 2/ | 3.2 | 3.9 | 13.6 | 7.7 | −1.1 | 2.5 | 4.2 | 1.0 | −1.5 | 8.3 | 3.4 | |||||||
| PV of public sector debt-to-revenue and grants ratio (in percent) | … | … | 579.7 | 486.9 | 690.6 | 556.1 | 550.1 | 551.9 | 487.9 | 420.2 | 173.8 | |||||||
| PVof public sector debt-to-revenue ratio (in percent) | … | … | 8328 | 714.1 | 783.3 | 736.8 | 763.6 | 715.5 | 544.3 | 440.2 | 175.4 | |||||||
| of which: external 3/ | … | … | 799.0 | 683.1 | 761.6 | 716.8 | 734.7 | 687.3 | 531.0 | 307.5 | 27.2 | |||||||
| Debt service-to-revenue and grants ratio (in percent) 4/ | 23.3 | 15.3 | 29.1 | 27.1 | 11.9 | 17.5 | 25.3 | 19.5 | 28.8 | 44.7 | 15.5 | |||||||
| Debt service-to-revenue ratio (in percent) 4/ | 32.1 | 23.7 | 41.8 | 39.8 | 13.5 | 23.2 | 35.1 | 25.2 | 32.1 | 46.8 | 15.7 | |||||||
| Primary deficit that stabilizes the debt-to-GDP ratio | −3.0 | −19.2 | 9.5 | 2.8 | −5.0 | −6.0 | −0.1 | 4.7 | 3.9 | 0.2 | 2.1 | |||||||
| Key macroeconomic and fiscal assumptions | ||||||||||||||||||
| Real GDP growth (in percent) | 6.2 | 7.3 | 7.4 | 7.0 | 2.4 | 5.8 | 4.8 | 6.3 | 6.0 | 7.2 | 7.5 | 6.3 | 6.0 | 7.3 | 6.2 | |||
| Average nominal interest rate on forexdebt (in percent) | 23 | 1.9 | 1.7 | 3.7 | 1.4 | 1.7 | 1.6 | 3.0 | 3.1 | 3.1 | 5.2 | 2.9 | 11.6 | 11.5 | 14.6 | |||
| Average real interest rate on domestic debt (in percent) | −3.6 | 1.4 | −24 | 0.0 | 3.7 | −1.7 | −2.0 | 0.1 | 1.3 | 1.3 | 1.3 | 0.1 | 1.3 | 1.6 | 1.5 | |||
| Real exchange rate depreciation (in percent, + indicates depreciatior | −27 | 2.0 | −7.7 | −0.4 | 7.2 | −6.7 | … | … | … | … | … | … | … | … | … | |||
| Inflation rate (GDP deflator, in percent) | 5.4 | 4.0 | 6.0 | 6.1 | 1.5 | 4.3 | 4.3 | 4.1 | 3.8 | 4.3 | 4.3 | 4.2 | 4.3 | 4.3 | 4.3 | |||
| Growth of real primary spending (deflated by GDP deflator, in percer | −1.4 | 24.4 | 4.2 | 2.7 | 7.7 | 13.0 | −36.8 | 48.7 | 4.3 | −5.6 | −15.5 | 1.4 | 7.7 | 9.3 | 8.5 | |||
| Grant element of new external borrowing (in percent) | … | … | … | … | … | 13.0 | 15.4 | 18.8 | 13.5 | 21.6 | 49.4 | 22.0 | 33.1 | 28.1 | … | |||
Gross government debt including hydro-related liabilities.
Gross financing need is defined as the primary deficit plus debt service plus the stock of short-term debt at the end of 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 overthe past 10years, subject to data availability.
Bhutan: Sensitivity Analysis for Key Indicators of Public Debt, 2018–2038
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.
Bhutan: Sensitivity Analysis for Key Indicators of Public Debt, 2018–2038
| Projections | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2028 | 2038 | |
| PV of Debt-to-GDP Ratio | ||||||||
| Baseline | 151 | 152 | 156 | 154 | 145 | 130 | 93 | 42 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 151 | 150 | 153 | 150 | 143 | 134 | 96 | 36 |
| A2. Primary balance is unchanged from 2018 | 151 | 155 | 160 | 160 | 153 | 144 | 114 | 61 |
| A3. Permanently lower GDP growth 1/ | 151 | 153 | 158 | 157 | 149 | 134 | 102 | 62 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2019–20 | 151 | 153 | 159 | 158 | 148 | 133 | 97 | 47 |
| B2. Primary balance is at historical average minus one standard deviations in 2019–202 | 151 | 156 | 162 | 160 | 150 | 135 | 97 | 45 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 151 | 153 | 159 | 157 | 147 | 132 | 94 | 42 |
| B4. One-time 30 percent real depreciation in 2019 | 151 | 213 | 216 | 214 | 202 | 184 | 138 | 70 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2019 | 151 | 160 | 164 | 162 | 153 | 137 | 99 | 46 |
| PV of Debt-to-Revenue Ratio 2/ | ||||||||
| Baseline | 487 | 691 | 556 | 550 | 552 | 488 | 420 | 174 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 487 | 683 | 549 | 541 | 548 | 505 | 434 | 149 |
| A2. Primary balance is unchanged from 2018 | 487 | 702 | 570 | 570 | 582 | 542 | 516 | 252 |
| A3. Permanently lower GDP growth 1/ | 487 | 694 | 561 | 558 | 563 | 503 | 460 | 257 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2019–20 | 487 | 692 | 565 | 559 | 563 | 500 | 438 | 195 |
| B2. Primary balance is at historical average minus one standard deviations in 2019–202 | 487 | 706 | 577 | 570 | 573 | 508 | 440 | 185 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 487 | 695 | 567 | 560 | 562 | 497 | 427 | 174 |
| B4. One-time 30 percent real depreciation in 2019 | 487 | 965 | 769 | 762 | 769 | 694 | 624 | 291 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2019 | 487 | 727 | 585 | 578 | 581 | 515 | 447 | 189 |
| Debt Service-to-Revenue Ratio 2/ | ||||||||
| Baseline | 27 | 12 | 18 | 25 | 19 | 29 | 45 | 16 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 27 | 12 | 17 | 25 | 19 | 28 | 44 | 15 |
| A2. Primary balance is unchanged from 2018 | 27 | 12 | 18 | 26 | 20 | 30 | 49 | 22 |
| A3. Permanently lower GDP growth 1/ | 27 | 12 | 18 | 26 | 20 | 30 | 47 | 21 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2019–20 | 27 | 12 | 18 | 26 | 20 | 29 | 46 | 17 |
| B2. Primary balance is at historical average minus one standard deviations in 2019–202 | 27 | 12 | 18 | 26 | 20 | 30 | 46 | 17 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 27 | 12 | 18 | 26 | 20 | 29 | 45 | 16 |
| B4. One-time 30 percent real depreciation in 2019 | 27 | 14 | 24 | 36 | 28 | 42 | 66 | 28 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2019 | 27 | 12 | 19 | 27 | 20 | 30 | 47 | 17 |
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.
Bhutan: Sensitivity Analysis for Key Indicators of Public Debt, 2018–2038
| Projections | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2028 | 2038 | |
| PV of Debt-to-GDP Ratio | ||||||||
| Baseline | 151 | 152 | 156 | 154 | 145 | 130 | 93 | 42 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 151 | 150 | 153 | 150 | 143 | 134 | 96 | 36 |
| A2. Primary balance is unchanged from 2018 | 151 | 155 | 160 | 160 | 153 | 144 | 114 | 61 |
| A3. Permanently lower GDP growth 1/ | 151 | 153 | 158 | 157 | 149 | 134 | 102 | 62 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2019–20 | 151 | 153 | 159 | 158 | 148 | 133 | 97 | 47 |
| B2. Primary balance is at historical average minus one standard deviations in 2019–202 | 151 | 156 | 162 | 160 | 150 | 135 | 97 | 45 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 151 | 153 | 159 | 157 | 147 | 132 | 94 | 42 |
| B4. One-time 30 percent real depreciation in 2019 | 151 | 213 | 216 | 214 | 202 | 184 | 138 | 70 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2019 | 151 | 160 | 164 | 162 | 153 | 137 | 99 | 46 |
| PV of Debt-to-Revenue Ratio 2/ | ||||||||
| Baseline | 487 | 691 | 556 | 550 | 552 | 488 | 420 | 174 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 487 | 683 | 549 | 541 | 548 | 505 | 434 | 149 |
| A2. Primary balance is unchanged from 2018 | 487 | 702 | 570 | 570 | 582 | 542 | 516 | 252 |
| A3. Permanently lower GDP growth 1/ | 487 | 694 | 561 | 558 | 563 | 503 | 460 | 257 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2019–20 | 487 | 692 | 565 | 559 | 563 | 500 | 438 | 195 |
| B2. Primary balance is at historical average minus one standard deviations in 2019–202 | 487 | 706 | 577 | 570 | 573 | 508 | 440 | 185 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 487 | 695 | 567 | 560 | 562 | 497 | 427 | 174 |
| B4. One-time 30 percent real depreciation in 2019 | 487 | 965 | 769 | 762 | 769 | 694 | 624 | 291 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2019 | 487 | 727 | 585 | 578 | 581 | 515 | 447 | 189 |
| Debt Service-to-Revenue Ratio 2/ | ||||||||
| Baseline | 27 | 12 | 18 | 25 | 19 | 29 | 45 | 16 |
| A. Alternative scenarios | ||||||||
| A1. Real GDP growth and primary balance are at historical averages | 27 | 12 | 17 | 25 | 19 | 28 | 44 | 15 |
| A2. Primary balance is unchanged from 2018 | 27 | 12 | 18 | 26 | 20 | 30 | 49 | 22 |
| A3. Permanently lower GDP growth 1/ | 27 | 12 | 18 | 26 | 20 | 30 | 47 | 21 |
| B. Bound tests | ||||||||
| B1. Real GDP growth is at historical average minus one standard deviations in 2019–20 | 27 | 12 | 18 | 26 | 20 | 29 | 46 | 17 |
| B2. Primary balance is at historical average minus one standard deviations in 2019–202 | 27 | 12 | 18 | 26 | 20 | 30 | 46 | 17 |
| B3. Combination of B1-B2 using one half standard deviation shocks | 27 | 12 | 18 | 26 | 20 | 29 | 45 | 16 |
| B4. One-time 30 percent real depreciation in 2019 | 27 | 14 | 24 | 36 | 28 | 42 | 66 | 28 |
| B5. 10 percent of GDP increase in other debt-creating flows in 2019 | 27 | 12 | 19 | 27 | 20 | 30 | 47 | 17 |
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.
The DSA was prepared jointly by IMF and International Development Association staff in collaboration with the Asian Development Bank and Bhutanese authorities. The analysis updates the previous Joint DSA dated June 8, 2016 (IMF Country Report No. 16/206). The DSA follows the IMF and World Bank Staff Guidance Note on the Application of the Joint Fund-Bank Debt Sustainability Framework for Low-Income Countries (November 7, 2013). The data underlying the analysis are from the Bhutanese authorities, IMF, and World Bank staff estimates.
See Box 1 in the 2014 DSA for more detail.
These increased costs are covered by the government of India for projects under the intergovernmental agreement.
The completion of three hydropower plants is incorporated in the baseline microframework: Mangdechhu (with capacity of 720 MW in FY2019), Puna II (with capacity of 1,020 MW in FY2021), and Puna I (with capacity of 1,200 MW in FY2023).
Note that the grant element in the total package is generally below the 35 percent threshold for concessionality as defined by the IMF’s debt limits policy.
Bhutan’s CPIA rating, which determined the thresholds for each indicator, is assessed to remain medium as in the 2016 DSA.
