Maximilien Kaffo Melou, Mariusz A. Sumlinski, and Chris Geiregat
point is to apply the probabilistic approach to the DSA proposed by Celasun, et al. (2006) and the insights from Hevia (2012) . Our econometric analysis suggests that the implementation of HIPC/MDRI may have coincided, or marked, a structural break in the dynamics of debt accumulation for HIPC/MDRIcountries. For the purposes of this study it causes the available sample to be considerably shorter, as not accounting for this break would bias the coefficient estimates that are used to forecast the debt paths. In line with the literature, our analysis includes a role
MDRI recipients - Before and after MDRI debt relief
Source: Joint Bank-Fund DSAs.
Note: Based on a sample of MDRI-recipient countries (see footnote 32).
29. MDRIcountries would still require substantial grant resources to preserve debt sustainability if aid were scaled up substantially to help them meet the MDGs.
Simulations in the Appendix show that small increases in concessional borrowing, say around 1 percent of GDP annually, would tend to have little effect on the debt sustainability outlook, but larger increases in new borrowing on the order of
This paper reviews the experience with the joint IMF-World Bank Debt Sustainability Framework for low-income countries, including cooperation between the staffs, and highlights the implications of the Multilateral Debt Relief Initiative.
This report reviews progress and issues in implementing the enhanced Heavily Indebted Poor Countries (HIPC) Initiative and reports on the implementation of the Multilateral Debt Relief Initiative (MDRI) by IDA, the IMF, and AfDF. It concludes that the volume of debt relief has increased significantly since the inception of the HIPC Initiative in 1996, thereby reducing HIPCs’ debt service burdens and allowing them to finance increased poverty reduction efforts. It also provides updated information on the costs of debt relief under the HIPC Initiative and the MDRI. Finally, it reviews the status of creditor participation and delivery of debt relief under the two initiatives, highlighting the challenges to increase the participation by non–Paris Club official bilateral and commercial creditors in the HIPC Initiative.
With inflation declining to single digits in many sub-Saharan African countries since the early 2000s, central banks currently face a different set of challenges. In particular, as is the case in other countries, the relationship between money and inflation has become weaker in a low-inflation environment, as countries have opened their capital accounts, attracting capital inflows, and deepened their financial markets. As advanced economies exit from unconventional monetary policies that were designed to provide economic stimulus in the wake of the global financial crisis, their tightening of monetary policy will increase funding costs for frontier market economies and heighten the risk of reversal of capital flows as recently experienced by a number of emerging markets. Against this backdrop, this chapter considers the conduct of monetary policy and its recent evolution in a select group of countries in sub-Saharan Africa, including the key factors driving the changes and the challenges they pose, and how policymakers are responding to them. The downside risks and policy recommendations set out in this chapter underscore the need for vigilant and effective monetary policy to help mitigate the risks to macroeconomic and financial stability.
The five Regional Economic Outlooks published biannually by the IMF cover Asia and Pacific, Europe, the Middle East and Central Asia, Sub-Saharan Africa, and the Western Hemisphere. In each volume, recent economic developments and prospects for the region are discussed as a whole, as well as for specific countries. The reports include key data for countries in the region. Each report focuses on policy developments that have affected economic performance in the region, and discusses key challenges faced by policymakers. The near-term outlook, key risks, and their related policy challenges are analyzed throughout the reports, and current issues are explored, such as when and how to withdraw public interventions in financial systems globally while maintaining a still-fragile economic recovery.These indispensable surveys are the product of comprehensive intradepartmental reviews of economic developments that draw primarily on information the IMF staff gathers through consultation with member countries.