Republic of the Marshall Islands : Joint Bank-Fund Debt Sustainability Analysis, 2018 Update
The 2018 Debt Sustainability Analysis (DSA) assesses that the Republic of the Marshall Islands (RMI) remains at high risk of debt distress. The ratios of the present value (PV) of external public and publicly-guaranteed (PPG) debt to GDP and to exp...
| Main Authors: | , |
|---|---|
| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/377321537338257776/Marshall-Islands-Joint-Bank-Fund-Debt-Sustainability-Analysis-2018-Update http://hdl.handle.net/10986/30529 |
| Summary: | The 2018 Debt Sustainability Analysis
(DSA) assesses that the Republic of the Marshall Islands
(RMI) remains at high risk of debt distress. The ratios of
the present value (PV) of external public and
publicly-guaranteed (PPG) debt to GDP and to exports are
currently just below their respective policy-dependent
indicative thresholds. The PV of the PPG debt-to-GDP ratio
is expected to decline slightly in the near term, but to
start increasing and exceed its indicative threshold in the
medium to long term. Stress tests confirm the vulnerability
of the debt position to lending terms as well as
macroeconomic shocks. Although the RMI does not currently
face debt servicing risks, helped by government revenue from
fishing licenses and a stable flow of funds from the U.S.
Compact grants until FY2023, a lack of fiscal buffers after
FY2023 and risks from contingent liabilities call for a
fiscal reform strategy. Containing the risk of debt distress
requires continuation of grants to support the country’s
large development needs, and implementation of fiscal and
structural reforms to promote fiscal sustainability and growth. |
|---|