[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-111166-en":3,"doc-seo-111166-105":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},111166,962075006959,"Anda","https://ap-avatar.wpscdn.com/avatar/e0002397efbe92a78e?_k=1776741047341049297",8,"Research & Report","Kyrgyz Republic - Joint World Bank-IMF Debt Sustainability Analysis - Moderate Risk of External and Overall Debt Distress","Joint World Bank-IMF staff assess the Kyrgyz Republic’s public debt as sustainable, with moderate risks of both external and overall debt distress. Key thresholds are lowered after downgrading debt carrying capacity, creating breaches under standard shocks (notably exports and growth). A customized 2022 stress test reflecting discontinued gold exports and reduced re-exports would still breach benchmarks under stronger capacity assumptions. External indicators trend downward and breaches remain limited, allowing some shock-absorption space. The overall risk remains “moderate” as fiscal deficits rise after 2026.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nAsad Alam and Manuela Francisco (IDA) and Subir Lall and Jay Peiris (IMF) .  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF) .  \n\n| KYRGYZ REPUBLIC: JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS |  |\n| --- | --- |\n| Risk of external debt distress | Moderate |\n| Overall risk of debt distress | Moderate |\n| Granularity in the risk rating | Some space to absorb shocks |\n| Application of judgment | No |\n\nStaff assesses the Kyrgyz Republic’s public debt as sustainable with moderate risks of external and overall debt distress. Because the Kyrgyz Republic’s debt carrying capacity has been downgraded to “medium” from“strong,” 1 all relevant thresholds have been lowered, resulting in a breach of the external debt threshold of the PV of debt-to-GDP ratio between 2025 and 2029 under a standard shock to exports. Moreover, the customized stress test that was applied in the 2022 DSA reflecting the discontinuation of gold exports and the collapse in re-exports would still result ina breach of the threshold for the ratio of the PV of external debt-to-GDP had the debt carrying capacity remained“strong.” Finally, because external debt burden indicators trend downward and the breaches are limited, staffs judge external public debt to be sustainable, with some space to absorb shocks. The PV of total public debt-to-GDP breaches its benchmark under the baseline scenario in 2028 under a standard shock to growth, resulting in the “moderate” rating for the overall risk of debt distress. Without fiscal discipline, the overall deficit will start increasing after 2026 as interest payments increase, and total public debt continues to rise to 67.2 percent of GDP by 2043. Creating fiscal space and containing debt vulnerabilities will require improving tax collections, reducing the wage bill and energy subsidies, strengthening debt management, seeking concessional financing and improving public investment management.  \n1 The DSA reflects medium debt carrying capacity considering the Kyrgyz Republic’s Composite Indicator of 2 .97, based on the October 2023 World Economic Outlooks and the 2022 CPIA vintage.  \n1. Public and Publicly Guaranteed (PPG) debt covers state government debt (both central and local government), state guarantees, and the debt of the central bank to the IMF (Text Table 1) . Almost all public sector debt is issued by the central government. The 2021 SDR allocation (SDR 170 million, equivalent to US$242 million), retroceded to the central government, is projected to be fully drawn down by end 2023 and is therefore counted fully toward public debt after that point. Local governments have no external debt and insignificant domestic debt. The social security fund has no debt. State-owned enterprises (SOEs) mostly borrow from the government and have no external debt by law. Their short-term domestic borrowing from the banking sector is limited and they do not have long-term domestic debt. In addition, the government has no outstanding guarantees.2 An analysis of fiscal risks by the World Bank found no significant PPG debt for new companies created as Public-Private Partnerships. Nevertheless, given the large stock of liabilities associated with the energy sector (equivalent to around 15 percent of GDP in 2022),3 and the recent conversion of energy SOE debt to equity due to solvency issues, a contingent liability shock of 7 percent of GDP is applied, of which 2 percent of GDP reflects an operational risk stemming from the structural cash shortfall of loss-making energy sector SOEs4 and 5 percent of GDP is the default value representing the average cost to the government during a financial crisis (Text Table 2) .  \n\n|  |\n| --- |\n| 1\u003Cbr>2\u003Cbr>3\u003Cbr>4\u003Cbr>5\u003Cbr>6\u003Cbr>7\u003Cbr>8 Subsectors of the public sector Sub-sectors covered Central government\u003Cbr>State and local government\u003Cbr>Other elements in the general government\u003Cbr>o","cbCailaBHCsJpD4L","https://ap.wps.com/l/cbCailaBHCsJpD4L","pdf",835206,1,19,"English","en",105,"# Risk Assessment of Debt Distress\n## External Debt Distress\n## Overall Debt Distress\n# Debt Carrying Capacity and Thresholds\n## Downgrade of Capacity and Breaches\n## Standard and Customized Stress Tests\n# Public Debt Composition and Fiscal Risk Assumptions\n## Public and Publicly Guaranteed (PPG) Debt\n## Contingent Liability Shocks (Energy Sector)","[{\"question\":\"What is the Kyrgyz Republic’s overall conclusion on debt sustainability?\",\"answer\":\"Staff judge the country’s public debt as sustainable, while risks of external and overall debt distress are moderate.\"},{\"question\":\"Why do debt distress thresholds lead to benchmark breaches in the analysis?\",\"answer\":\"The debt carrying capacity was downgraded, lowering the relevant thresholds, which results in breaches under standard shock scenarios.\"},{\"question\":\"What factors drive the expected rise in overall deficits and public debt after 2026?\",\"answer\":\"Without fiscal discipline, the overall deficit is projected to increase after 2026 as interest payments rise, and total public debt is projected to keep 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is the Kyrgyz Republic’s overall conclusion on debt sustainability?","Question",{"text":75,"@type":76},"Staff judge the country’s public debt as sustainable, while risks of external and overall debt distress are moderate.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"Why do debt distress thresholds lead to benchmark breaches in the analysis?",{"text":80,"@type":76},"The debt carrying capacity was downgraded, lowering the relevant thresholds, which results in breaches under standard shock scenarios.",{"name":82,"@type":73,"acceptedAnswer":83},"What factors drive the expected rise in overall deficits and public debt after 2026?",{"text":84,"@type":76},"Without fiscal discipline, the overall deficit is projected to increase after 2026 as interest payments rise, and total public debt is projected to keep 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