[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-111869-en":3,"doc-seo-111869-105":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},111869,962075114101,"Seraphina","https://ap-avatar.wpscdn.com/avatar/e000253a75eb197efd?x-image-process=image/resize,m_fixed,w_180,h_180&k=1780044092746381165",8,"Research & Report","Lao People’s Democratic Republic - Joint Bank-Fund Debt Sustainability Analysis - External and Overall Debt Distress","Lao P.D.R. is assessed as being in external and overall debt distress under the Low-Income Countries Debt Sustainability Framework (LIC-DSF), with granularity indicating an unsustainable risk rating. The assessment reflects a challenging debt dynamic: significant starting debt, ongoing currency depreciation amid higher external financing needs, and policy expansion. Deferrals reduce gross financing needs in 2024, but depreciation later raises debt ratios. Debt indicators remain far above thresholds for decades, implying a high probability of future distress.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nManuela Francisco and Lalita Moorty (IDA) and Rupa Duttagupta and Peter Dohlman (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF) 1  \n\n| LAO PEOPLE’S DEMOCRATIC REPUBLIC\u003Cbr>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\nThe [Lao P.D.R. is](Lao P.D.R. is) assessed to be in external and overall debt distress under the Low-Income Countries Debt Sustainability Framework (LIC-DSF).2The Lao P.D.R. is assessed to be in external and overall debt distress under the Low-Income Countries Debt Sustainability Framework (LIC-DSF). As the 2023 Debt Sustainability Analysis, the country’s debt sustainability is still in a challenging situation due to the significant amount of debt at the starting point and a continuing currency depreciation against the backdrop of surging external financing needs and the expansionary monetary policy. PPG and external debt to GDP ratios are projected to decline in 2024 dueto deferrals on principal repayments, lowering gross financing needs. But after that currency depreciation would drives up the debt ratio, despite primary surpluses and positive real GDP growth. As a result, most of the PPG external and public debt indicators for both solvency and liquidity, including the present value of PPG debt-to-GDP ratio, would remain very high and above the indicative threshold significantly for two decades, which indicate a high probability of a future distress event. The continued debt servicing deferrals over recent years, including again in 2024, and on-going negotiations also indicate debt distress. This result, along with the evidence of major economic vulnerabilities (including significant financing needs, limited access to international markets, limited international reserves, increasing rollover risks,  \n1 This DSA has been prepared jointly by the IMF and World Bank, following the 2018 Guidance Note on the Bank-Fund Debt Sustainability Framework for Low-Income Countries.  \n2 The Lao P. D. R. Composite Indicator of 2.306 indicates a weak debt-carrying capacity, based on the April 2024 IMF’s World Economic Outlook (WEO) and the 2022 World Bank’s Country Policy and Institutional Assessment (CPIA) .  \npotential for additional exchange rate depreciation pressures and bank recapitalization, and substantial contingent liabilities), warrants a rating of “in debt distress” for both external and public debt and an assessment of unsustainable public debt. Adjustment options are limited, as the primary surpluses required to reduce debt indicators below risk thresholds in the mediumterm are not politically feasible or socially desirable.  \n1. The debt coverage in this Debt Sustainability Analysis (DSA) comprises debt owed by the central government and government guarantees, including to state-owned enterprises (SOEs)  \n(Text Table 1) . Publicly guaranteed SOE external debt included in the DSA baseline is on-lent or guaranteed by the central government. There is no outstanding debt to the IMF. External debt is defined based on the currency criterion in this analysis. The debt stock includes a swap line with the People’s Bank of China (PBoC) dating from 2020, which is for balance of payments support to help shore up gross reserves. Debt stock data also take into account deferrals of interest payments (mainly to China) from 2021 to 2023, and expenditure arrears.  \n2. There have been ongoing efforts by the authorities to enhance debt transparency. The government published an annual debt statistics bulletin for the first time in 2021 that includes publicly guaranteed external debt and domestic debt contracted by the central government, and the following bulletins included more detailed","cbCaifLEp9tUD0lV","https://ap.wps.com/l/cbCaifLEp9tUD0lV","pdf",1454383,1,33,"English","en",105,"# Executive Assessment\n## Debt distress ratings and granularity\n## Key drivers and timeline of debt indicators\n# Coverage and Definitions\n## Public and guaranteed debt scope\n## Debt stock items and exclusions","[{\"question\":\"How is Lao P.D.R.'s debt situation rated under the LIC-DSF?\",\"answer\":\"The document assesses Lao P.D.R. as being in external and overall debt distress, with granularity indicating an unsustainable risk rating. The application of judgment is marked as no.\"},{\"question\":\"What factors explain why the debt risk remains unsustainable?\",\"answer\":\"A large debt stock at the outset, continuing currency depreciation, and rising external financing needs are identified as core pressures. Even with 2024 declines in financing needs from principal repayment deferrals, later depreciation drives debt ratios up and keeps key indicators above thresholds for decades.\"},{\"question\":\"What does the DSA coverage include and exclude?\",\"answer\":\"Coverage includes central government debt and government guarantees, including to state-owned enterprises (SOEs), with externally defined debt based on the currency criterion. The document notes that many public subsectors are not covered (e.g., some local government and non-guaranteed SOE debt), so tailored stress tests are used for uncovered contingent liabilities.\"}]",1784492080,83,{"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},"lao-peoples-democratic-republic-joint-bank-fund-debt-sustainability-analysis-external-and-overall-debt-distress","",{"@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/lao-peoples-democratic-republic-joint-bank-fund-debt-sustainability-analysis-external-and-overall-debt-distress/111869/",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","2026-07-22","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},"How is Lao P.D.R.'s debt situation rated under the LIC-DSF?","Question",{"text":75,"@type":76},"The document assesses Lao P.D.R. as being in external and overall debt distress, with granularity indicating an unsustainable risk rating. The application of judgment is marked as no.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"What factors explain why the debt risk remains unsustainable?",{"text":80,"@type":76},"A large debt stock at the outset, continuing currency depreciation, and rising external financing needs are identified as core pressures. Even with 2024 declines in financing needs from principal repayment deferrals, later depreciation drives debt ratios up and keeps key indicators above thresholds for decades.",{"name":82,"@type":73,"acceptedAnswer":83},"What does the DSA coverage include and exclude?",{"text":84,"@type":76},"Coverage includes central government debt and government guarantees, including to state-owned enterprises (SOEs), with externally defined debt based on the currency criterion. 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