[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-110161-en":3,"doc-seo-110161-105":29,"detail-sidebar-cat-0-en-105":90},{"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":4,"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},110161,962075006959,"Anda","https://ap-avatar.wpscdn.com/avatar/e0002397efbe92a78e?_k=1776741047341049297",8,"Research & Report","Lao People’s Democratic Republic: Joint Bank-Fund Debt Sustainability Analysis - In debt distress","Joint IMF-World Bank Debt Sustainability Analysis assesses the Lao People’s Democratic Republic under the Low-Income Countries Debt Sustainability Framework. The country is rated in external and overall debt distress, with granularity indicating unsustainable public debt. Deterioration versus the 2019 assessment is linked to adverse macroeconomic conditions, including exchange rate depreciation, expanded coverage to guaranteed debt, expenditure arrears, and domestic borrowing for state-owned bank recapitalization.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nHassan Zaman and Manuela Francisco (IDA) and Sanjaya Panth and Geremia Palomba (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: JOINT BANK-FUND\u003Cbr>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 | Yes. Given on-going negotiations about debt service deferral and significant and sustained breaches of debt thresholds |\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) . Compared to the 2019 Debt Sustainability Analysis2 , the country’s risk rating and debt sustainability have deteriorated due to an adverse macroeconomic environment (through a strong exchange rate depreciation), an expansion of debt coverage to include guaranteed debt, expenditure arrears, and the issuance of domestic debt to recapitalize state-owned banks.3 PPG and external debt are projected to decline in the baseline scenario, reflecting small primary surpluses and economic growth above interest rates, but the present value of PPG debt-to-GDP ratio remains very high and above the indicative threshold for two decades. Most of the PPG external and public debt indicators for both solvency and liquidity have persistent breaches of their indicative thresholds. The on-going negotiations about debt service deferral indicate debt distress and the significant and  \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 Country report No. 19/267, August 2019.  \n3 The Lao P. D. R. Composite Indicator of 2.15 indicates a weak debt-carrying capacity, based on the October 2022 IMF’s World Economic Outlook (WEO) and the 2021 World Bank’s Country Policy and Institutional Assessment (CPIA) .  \nsustained breaches of debt thresholds in the DSA also indicate a high probability of a future distress event.This result, along with the evidence of major economic vulnerabilities (including significant financing needs, low foreign exchange liquidity and reserves, limited external market access since 2020, limited potential for financing from domestic capital markets, increasing rollover risks, potential for additional exchange rate depreciation pressures, possible accumulation of additional domestic arrears, and substantial contingent liabilities), warrants, through the application of judgement, a rating of “in debt distress” for both external and public debt and an assessment of unsustainable public debt. Other DSA results show that external debt is most vulnerable to shocks to exports and a depreciation of the currency, while public debt is most sensitive to the contingent liabilities shock. Adjustment options are limited, as the primary surpluses required to reduce debt indicators below risk thresholds within a few years 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) in 2020, given that the swap appears to be for balance of payments support to help shore up gross reserves. The stock also includes past deferred interest payments in 2021 and 2022, and expenditure arrears. There have been ongoing","cbCaisa8Tk96AZVZ","https://ap.wps.com/l/cbCaisa8Tk96AZVZ","pdf",2668704,1,31,"English","en",105,"# Risk assessment under LIC-DSF\n## External and overall debt distress\n## Reasons for deterioration since 2019\n## Key breaches and judgment applied\n## Vulnerability to shocks and limited adjustment options\n# Debt coverage and stress testing\n## Public sector subsectors covered\n## Definitions and debt stock inclusions\n## Debt transparency efforts and data gaps\n## Contingent liability stress test setup","[{\"question\":\"What is the overall debt distress rating for the Lao P.D.R. under the LIC-DSF?\",\"answer\":\"The analysis rates both external and overall debt as “in debt distress,” with public debt assessed as unsustainable.\"},{\"question\":\"Why did the debt sustainability outcome deteriorate compared with the 2019 assessment?\",\"answer\":\"It reflects an adverse macroeconomic environment, strong exchange rate depreciation, expansion of debt coverage to guaranteed debt, expenditure arrears, and issuance of domestic debt to recapitalize state-owned banks.\"},{\"question\":\"Which shocks affect external debt most, and what affects public debt most?\",\"answer\":\"External debt is most vulnerable to shocks to exports and currency depreciation, while public debt is most sensitive to contingent liability shocks.\"}]",1784484173,78,{"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":85,"head_meta":87,"extra_data":89,"updated_unix":27},"lao-peoples-democratic-republic-joint-bank-fund-debt-sustainability-analysis-in-debt-distress","",{"@graph":35,"@context":84},[36,53,67],{"@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-in-debt-distress/110161/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":61,"encodingFormat":60,"isAccessibleForFree":62,"interactionStatistic":63},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-19",true,{"@type":64,"interactionType":65,"userInteractionCount":4},"InteractionCounter",{"@type":66},"ViewAction",{"@type":68,"mainEntity":69},"FAQPage",[70,76,80],{"name":71,"@type":72,"acceptedAnswer":73},"What is the overall debt distress rating for the Lao P.D.R. under the LIC-DSF?","Question",{"text":74,"@type":75},"The analysis rates both external and overall debt as “in debt distress,” with public debt assessed as unsustainable.","Answer",{"name":77,"@type":72,"acceptedAnswer":78},"Why did the debt sustainability outcome deteriorate compared with the 2019 assessment?",{"text":79,"@type":75},"It reflects an adverse macroeconomic environment, strong exchange rate depreciation, expansion of debt coverage to guaranteed debt, expenditure arrears, and issuance of domestic debt to recapitalize state-owned banks.",{"name":81,"@type":72,"acceptedAnswer":82},"Which shocks affect external debt most, and what affects public debt most?",{"text":83,"@type":75},"External debt is most vulnerable to shocks to exports and currency depreciation, while public debt is most sensitive to contingent liability 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