Publication: Togo- Joint World Bank-IMF Debt Sustainability Analysis
Date
2019-07
ISSN
Published
2019-07
Author(s)
World Bank
International Monetary Fund
Abstract
Togo's risk of external debt
distress continues to be moderate, while the overall risk of
debt distress is high—unchanged from the previous Debt
Sustainability Analysis (DSA) published in December 2018.
While the mechanical results point to a low risk of external
debt distress, judgment was applied given vulnerabilities
arising from high domestic debt, which could, for example,
likely lead to a reprofiling operation that would lead to an
increase in external debt. Togo's public debt is on a
downward trajectory despite an increase in 2018 compared
with 2017. Togo's high public debt is the result of,
among other factors, high deficits, contingent liabilities,
and accumulated arrears. There is very little space to
absorb shocks on total public debt. Baseline projections
show that Togo's PV of total PPG debt (external plus
domestic)-to-GDP ratio will decline below the new debt
distress benchmark of 55 percent starting in 2023, down from
72 percent in 2018—with the bulk constituting domestic debt
obligations. This analysis highlights the need for sustained
fiscal consolidation, improved debt management, and strong
macroeconomic policies to reduce the public debt to prudent
levels over the medium term.
Citation
“World Bank; International Monetary Fund. 2019. Togo- Joint World Bank-IMF Debt Sustainability Analysis; Togo- Joint World Bank-IMF Debt Sustainability Analysis. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/32564 License: CC BY 3.0 IGO.”