[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-111554-en":3,"doc-seo-111554-105":29,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},111554,1099514068035,"Ezra","https://ap-avatar.wpscdn.com/davatar_276721f389ce27ea32af1340a28f341c",8,"Research & Report","Djibouti - Joint Bank-Fund Debt Sustainability Analysis - Debt distress assessment and policy recommendations","Djibouti’s overall and external public debts are assessed as being in distress and unsustainable, reflecting the build-up of sizable external arrears and prolonged breaches of key sustainability thresholds for the present value of overall and external debt-to-GDP and external debt service-to-revenues. The debt outlook is vulnerable to export and primary balance shocks, with longer shocks creating additional downside risk. Despite a temporary debt service moratorium agreement, restoring sustainability requires structural and fiscal reforms, stronger public debt management, new concessional financing, and debt relief.","Public Disclosure Authorized  \nApproved by:  \nManuela Francisco and Nadir Mohammed (IDA) and Taline Koranchelian and Bergljot Barkbu (IMF) .  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF) .  \nPub lic Disc losure Authorized  \n\n| DJIBOUTI: JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS |  |\n| --- | --- |\n| Risk of external debt distress | In debt distress |\n| Overall risk of debt distress | In debt distress |\n| Granularity in the risk rating | Unsustainable |\n| Application of judgment | No |\n\nDjibouti’s overall and external public debts are assessed to be in distress and unsustainable. The assessment reflects the accumulation of sizeable external arrears and large and protracted breaches of the sustainability thresholds of the PV of Overall and External Debt-to-GDP and External Debt Service-to-Revenues ratios. The DSA suggests that Djibouti is susceptible to export and primary balance shocks; more prolonged and protracted shocks to the economy would also present downside risks to the debt outlook.1  \nAccording to preliminary information, however, the authorities have reached an agreement with Exim Bank China fora temporary debt service moratorium. This reopens important policy space but restoring debt sustainability would require a balanced mix of structural and fiscal reforms, strengthened public debt management, new concessional financing, and debt relief.  \nA Medium-Term Debt Strategy is essential to entrench debt sustainability. In particular, it would be helpful to anchor debt—for instance through a target debt level, to be reached by a certain year, or a targeted path for fiscal deficits, to ensure fiscal policy coherence. In addition, reining in borrowing by state-owned enterprises (SOEs), which has accounted for 80 percent of external borrowing since 2013, will be key. These could take the form of a ceiling on overall SOE debt together with a requirement of a balance sheet analysis for each SOE borrowing request. Such a rulesbased framework would help prioritization of investment projects while also strengthening planning and budgeting.  \n1 Djibouti’s current composite indicator (CI) is 2. 16, which corresponds to a weak debt-carrying capacity as confirmed by the October 2023 World Economic Outlook assumptions and the 2022 World Bank’s Country Policy and Institutional Assessment (CPIA) .  \nPUBLIC DEBT COVERAGE  \n1. The coverage of public debt used for this DSA is public and publicly guaranteed (PPG) debt. Specifically, the debt stock covers central government debt and government guarantees on external debt of SOEs. Data on non-guaranteed external debt held by SOEs is not available and therefore standard assumptions are used. Information on domestic debt remains partial.2 Domestic debt contracted by the central government is covered by the authorities’ data (and hence included in this DSA) and remains small. SOEs’ domestic debt is not captured. With support from the World Bank, the authorities have enhanced debt transparency since 2022 by regularly publishing information on all new or restructured public or publicly guaranteed loans, including those extended to State-Owned Enterprises (SOEs) . This DSA applies the standard stress tests and additional tailored stress tests on contingent liabilities (Text Table 4) .3  \n\n| Text Table 1. Djibouti: Public Debt Coverage |  |  |\n| --- | --- | --- |\n| 1 | Subsectors of the public sector Sub-sectors covered |  |\n|  | Central government X |  |\n| 2 | State and local government |  |\n| 3 | Other elements in the general government |  |\n| 4 | o/w: Social security fund |  |\n| 5 | o/w: Extra budgetary funds (EBFs) |  |\n| 6 | Guarantees (to other entities in the public and private sector, including to SOEs) X |  |\n| 7 | Central bank (borrowed on behalf of the government) X |  |\n| 8 | Non-guaranteed SOE debt |  |\n|  |  |  |\n\nBACKGROUND ON DEBT  \n2. Debt accumulated rapidly between 2013 and 2022 as Djibouti expanded its role","cbCaikZLuHAYnyTR","https://ap.wps.com/l/cbCaikZLuHAYnyTR","pdf",595599,1,18,"English","en",105,"# Risk assessment and overall debt distress\n## External debt distress indicators\n## Judgment and granular risk rating\n# Policy space and medium-term debt strategy\n## Temporary moratorium and reform package\n## Structural and fiscal measures\n# Public debt coverage methodology\n## Coverage scope and data limitations\n## Stress tests and contingent liabilities\n# Background on debt accumulation\n## Infrastructure-driven debt growth\n## Recent borrowing and guarantees","[{\"question\":\"What is the overall conclusion of the Joint Bank-Fund Debt Sustainability Analysis for Djibouti?\",\"answer\":\"Djibouti’s overall and external public debts are assessed as being in distress and unsustainable, driven by external arrears and sustained breaches of debt sustainability thresholds.\"},{\"question\":\"What shocks are Djibouti most susceptible to according to the analysis?\",\"answer\":\"The analysis indicates susceptibility to export shocks and primary balance shocks, and notes that more prolonged shocks would worsen downside risks to the debt outlook.\"},{\"question\":\"What would be required to restore debt sustainability after the temporary debt service moratorium?\",\"answer\":\"Restoring sustainability would require a balanced mix of structural and fiscal reforms, strengthened public debt management, new concessional financing, and debt relief, supported by a medium-term debt strategy.\"}]",1784490651,45,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":86,"head_meta":88,"extra_data":90,"updated_unix":27},"djibouti-joint-bank-fund-debt-sustainability-analysis-debt-distress-assessment-and-policy-recommendations","",{"@graph":35,"@context":85},[36,53,68],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/djibouti-joint-bank-fund-debt-sustainability-analysis-debt-distress-assessment-and-policy-recommendations/111554/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":62,"encodingFormat":60,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-20","2026-07-19",true,{"@type":65,"interactionType":66,"userInteractionCount":20},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"What is the overall conclusion of the Joint Bank-Fund Debt Sustainability Analysis for Djibouti?","Question",{"text":75,"@type":76},"Djibouti’s overall and external public debts are assessed as being in distress and unsustainable, driven by external arrears and sustained breaches of debt sustainability thresholds.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"What shocks are Djibouti most susceptible to according to the analysis?",{"text":80,"@type":76},"The analysis indicates susceptibility to export shocks and primary balance shocks, and notes that more prolonged shocks would worsen downside risks to the debt outlook.",{"name":82,"@type":73,"acceptedAnswer":83},"What would be required to restore debt sustainability after the temporary debt service moratorium?",{"text":84,"@type":76},"Restoring sustainability would require a balanced mix of structural and fiscal reforms, strengthened public debt management, new concessional financing, and debt relief, supported by a medium-term 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