[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-110345-en":3,"doc-seo-110345-105":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},110345,4398048949847,"Eliana","https://ap-avatar.wpscdn.com/avatar/400002536579ef2da7f?_k=1778318612642679267",8,"Research & Report","Nicaragua - Joint Bank-Fund Debt Sustainability Analysis - Moderate risk of external debt distress","Debt Sustainability Analysis for Nicaragua under a joint World Bank–IMF framework evaluates the risk of external and overall debt distress. Results indicate moderate risk, with debt sustainable but with limited space to absorb shocks. Under the baseline scenario, external debt burden indicators remain below thresholds; however, the present value of public and publicly guaranteed debt and the external debt-to-GDP ratio breach thresholds in export contraction, capital flows, and combined stress scenarios. Downside risks include weaker activity, climate-related disasters, and uncertainty around external financing and fiscal pressures.","Public Disclosure Authorized  \nApproved by:  \nRobert R. Taliercio and Marcello Estevão (IDA) and James Morsink and Maria Gonzalez (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF) .  \nPub lic Disc losure Authorized  \n\n| NICARAGUA: 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 | Debt is sustainable with some space to absorb shocks |\n| Application of judgment | No |\n\nCompared to the previous DSA prepared in the context of the requests for purchase under the RFI and disbursement under the RCF in November 2020, Nicaragua’s debt path and space to absorb shocks improved even as the overall and external debt distress risk rating remain moderate.1 Under the baseline scenario, external debt burden indicators remain below the threshold. However, the Present Value (PV) of public and Publicly Guaranteed Debt (PPG), and external debt-to-GDP ratio breach the threshold over an extended period under three standardized stress scenarios: an export contraction shock, a capital flows shock, and a combination of external shocks. The PV of the public debt-toGDP ratio is projected to be below the threshold under the baseline scenario, but it is projected to surpass the threshold under most standardized stress scenarios, notably lower GDP growth, and realization of contingent liability shocks. Downside risks are linked to weaker economic activity, risks of exogenous shocks such as climate-related natural disasters, and uncertainty over external financing as well as associated fiscal pressures that could adversely affect the debt profile.  \n1 The Composite Index (CI) is estimated at 3.01 and is based on the latest World Bank’s CPIA and the October 2022 WEO. Nicaragua’s debt-carrying capacity remains medium.  \n1. Nicaragua’s public debt statistics are reported at the Consolidated Public Sector (CPS) level.  \nThe public debt definition used in this Debt Sustainability Analysis (DSA) covers the consolidated debt of the budgetary central government, decentralized entities, the state-owned enterprises guaranteed debt, and the Central Bank of Nicaragua (BCN) (Text Table 1) .2 , 3 Consistent with previous DSAs since 2013, this DSA assumes the delivery of expected Heavily Indebted Poor Countries (HIPC) debt relief by Non-Paris Club creditors that have yet to deliver it (see Paragraph 5) .  \n2. The DSA is conducted on a residency basis. In the case of Nicaragua, there are no foreign holdings of local currency debt issued domestically (as in previous DSAs) .  \n|  | Subsectors of the Public Sector\u003Cbr>Central Government\u003Cbr>State and Local Government\u003Cbr>Other Elements in the General Government\u003Cbr>o/w: Social Security Fund\u003Cbr>o/w: Extra Budgetary Funds (EBFs)\u003Cbr>Guarantees (to other entities in the public and private sector, including to SOEs)\u003Cbr>Central Bank (borrowed on behalf of the government)\u003Cbr>Non-guaranteed SOE Debt\u003Cbr>Sub-sectors Covered\u003Cbr>X\u003Cbr>X\u003Cbr>X\u003Cbr>X |\n| --- | --- |\n| 1\u003Cbr>2\u003Cbr>3\u003Cbr>4\u003Cbr>5\u003Cbr>6\u003Cbr>7\u003Cbr>8 |  |\n\n| 1 | The Country's Coverage of Public Debt The central government plus social security, central bank, government-guaranteed debt |  |  |  |\n| --- | --- | --- | --- | --- |\n|  |  | Default | Used for the analysis | Reasons for deviations from the default settings |\n| 2 | Other Elements of the General Government not Captured in 1 | 0 percent of GDP | 0.0 |  |\n| 3 | SOE's Debt (guaranteed and not guaranteed by the government) 1/ | 2 percent of GDP | 2.0 |  |\n| 4 | PPP | 35 percent of PPP stock | 2.2 |  |\n| 5 | Financial Market (the default value of 5 percent of GDP is the minimum value) | 5 percent of GDP | 5.0 |  |\n|  | Total (2+3+4+5) (in percent of GDP) 9.2 |  |  |  |\n\n1/ The default shock of 2% of GDP will be triggered for countries whose government-guaranteed debt is not fully captured under the country's public debt definition (","cbCaicnwFapj7g6A","https://ap.wps.com/l/cbCaicnwFapj7g6A","pdf",672902,1,19,"English","en",105,"# Risk assessment\n## Baseline vs standardized stress scenarios\n## Debt definitions and coverage\n## Debt indicators and projected thresholds","[{\"question\":\"What is the overall and external debt distress risk rating for Nicaragua?\",\"answer\":\"Both the risk of external debt distress and the overall risk of debt distress are rated as moderate.\"},{\"question\":\"Which scenarios cause threshold breaches in the debt indicators?\",\"answer\":\"The present value of public and publicly guaranteed debt and the external debt-to-GDP ratio breach thresholds under export contraction, capital flows, and combined external shock stress scenarios.\"},{\"question\":\"Why is Nicaragua’s debt carrying capacity considered medium?\",\"answer\":\"The analysis references a Composite Index estimate based on the latest World Bank CPIA and the October 2022 WEO, leading to a medium debt-carrying capacity assessment.\"}]",1784484993,48,{"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},"nicaragua-joint-bank-fund-debt-sustainability-analysis-moderate-risk-of-external-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/nicaragua-joint-bank-fund-debt-sustainability-analysis-moderate-risk-of-external-debt-distress/110345/",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},"What is the overall and external debt distress risk rating for Nicaragua?","Question",{"text":75,"@type":76},"Both the risk of external debt distress and the overall risk of debt distress are rated as moderate.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"Which scenarios cause threshold breaches in the debt indicators?",{"text":80,"@type":76},"The present value of public and publicly guaranteed debt and the external debt-to-GDP ratio breach thresholds under export contraction, capital flows, and combined external shock stress scenarios.",{"name":82,"@type":73,"acceptedAnswer":83},"Why is Nicaragua’s debt carrying capacity considered medium?",{"text":84,"@type":76},"The analysis references a Composite Index estimate based on the latest World Bank CPIA and the October 2022 WEO, leading to a medium debt-carrying capacity 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