Publication:
Assessment of Contingent Liabilities and Their Impact on Debt Dynamics in South Africa

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dc.contributor.authorBachmair, Fritz Florian
dc.contributor.authorBogoev, Jane
dc.date.accessioned2018-06-19T20:05:59Z
dc.date.available2018-06-19T20:05:59Z
dc.date.issued2018-05
dc.description.abstractThe aim of this analysis is to quantify the losses from potential materialization of contingent liabilities by applying a new methodology for the case of South Africa and, to assess their impact on debt dynamics. Accordingly, we bring a novelty to this research by utilizing probabilities of distress, which is a different approach compared to the existing, already applied methodology. The central finding of the simulations conducted is that estimated losses from contingent liabilities, are significantly lower in the first year when they materialize compared to the existing applied methodology, and will gradually add up over time. Accordingly, the solvency and liquidity situation in the country will deteriorate. For example, the largest deterioration will occur in the debt to GDP ratio where the debt accumulation may be higher by 2.1 percent of GDP within three years, compared to the baseline projection. What is more concerning is that the debt trajectory is not stabilizing and losses incurred from materialization of contingent liabilities may become significant driving factor of debt accumulation in medium-term. Ultimately, the current estimates suggest that contingent liabilities may constitute a drag to fiscal policy in medium-term and their long-term accumulation may jeopardize the debt sustainability of the country. In that respect, this analysis suggests remedial measures and building protective buffers by the South African Treasury in the case CLs materialize.en
dc.identifierhttp://documents.worldbank.org/curated/en/645381528134003501/Assessment-of-contingent-liabilities-and-their-impact-on-debt-dynamics-in-South-Africa
dc.identifier.doi10.1596/29910
dc.identifier.urihttps://hdl.handle.net/10986/29910
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesMTI Global Practice Discussion Paper;No. 1
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectCONTINGENT LIABILITY
dc.subjectDEBT
dc.subjectDEBT SUSTAINABILITY
dc.subjectPUBLIC DEBT
dc.subjectDEBT SERVICE
dc.subjectDEBT MANAGEMENT
dc.subjectPUBLIC FINANCE
dc.titleAssessment of Contingent Liabilities and Their Impact on Debt Dynamics in South Africaen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleAssessment of Contingent Liabilities and Their Impact on Debt Dynamics in South Africa
okr.date.disclosure2018-06-04
okr.doctypePublications & Research
okr.doctypePublications & Research::Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/645381528134003501/Assessment-of-contingent-liabilities-and-their-impact-on-debt-dynamics-in-South-Africa
okr.guid645381528134003501
okr.identifier.doi10.1596/29910
okr.identifier.externaldocumentum090224b085b678c6_1_0
okr.identifier.internaldocumentum29956307
okr.identifier.report126841
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/645381528134003501/pdf/126841-NWP-add-series-PUBLIC-MTI-Discussion-Paper-1.pdfen
okr.region.administrativeAfrica
okr.region.countrySouth Africa
okr.topicPublic Sector Development::Public Sector Economics
okr.topicFinance and Financial Sector Development::Banks & Banking Reform
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicFinance and Financial Sector Development::Financial Crisis Management & Restructuring
okr.topicFinance and Financial Sector Development::Public & Municipal Finance
okr.topicPublic Sector Development::Public Financial Management
okr.unitGMT - Operational Services (GMTOS)
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