Arbeitspapier

Public Debt Sustainability in Developing Asia: An Update

Our previous assessment of debt sustainability in developing Asia, conducted in 2011, found that the region's fiscal outlook was mostly benign. In this study we update the debt sustainability assessment, taking stock of the latest data and including a larger number of countries. With the benefit of hindsight, we assess the accuracy of our earlier debt ratio forecasts and the underlying macroeconomic assumptions. By and large, we find that standard debt sustainability analysis (DSA) represents a valid forecasting tool, able to predict debt ratios fairly accurately under reasonable assumptions and circumstances. Further, our fan chart analysis confirms the importance for stochastic analysis to integrate standard DSA, in order to capture heightened macroeconomic volatility, which we observe for some countries in the region. Looking forward to 2020, debt ratio projections confirm that the outlook remains benign for the region as a whole, country heterogeneity notwithstanding. On the issue of DSA methods and implementation, we emphasize the importance of macroeconomic forecast accuracy and suggest that volatility be captured by risk analysis tools that would optimally flank the standard DSA framework.

Language
Englisch

Bibliographic citation
Series: ADB Economics Working Paper Series ; No. 468

Classification
Wirtschaft
Fiscal Policy
National Debt; Debt Management; Sovereign Debt
Forecasts of Budgets, Deficits, and Debt
Subject
debt-to-GDP ratio
fan charts
public debt sustainability
sovereign debt

Event
Geistige Schöpfung
(who)
Ferrarini, Benno
Ramayandi, Arief
Event
Veröffentlichung
(who)
Asian Development Bank (ADB)
(where)
Manila
(when)
2015

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Ferrarini, Benno
  • Ramayandi, Arief
  • Asian Development Bank (ADB)

Time of origin

  • 2015

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