[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-111543-en":3,"doc-seo-111543-105":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},111543,8796095461610,"Oliver","https://ap-avatar.wpscdn.com/davatar_276721f389ce27ea32af1340a28f341c",8,"Research & Report","Republic of Congo - Joint World Bank-IMF Debt Sustainability Analysis - Debt Distress Risk Assessment","Joint World Bank–IMF debt sustainability analysis classifies the Republic of Congo’s overall and external debt as “in debt distress,” reflecting ongoing restructuring and audit of domestic arrears alongside recurring accumulation of temporary external arrears. Despite that classification, the assessment judges the debt position as “sustainable,” supported by progress resolving legacy external arrears and plans to lower external liquidity and solvency indicators below thresholds by 2026 under the baseline scenario. Key risks include oil price shocks and tighter regional financing conditions.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nManuela Francisco and Abebe Adugna (IDA), and Vitaly Kramarenko and Niamh Sheridan (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF)  \n\n| REPUBIC OF CONGO: 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 | Sustainable |\n| Application of judgment | Yes. While external arrears are currently below 1 percent of GDP, there is a high likelihood of further recurrence. |\n\nThe overall and external debt 1 of the Republic of Congo are classified as “in distress”, reflecting the ongoing restructuring and audit of domestic arrears, as well as the recurrent accumulation of temporary external arrears but debt is assessed as “sustainable”. All legacy external arrears (those already existing by the inception of the ECF) have been resolved by the time of the fifth review of the ECF, with exception of disputed debt and pre-HIPC claims.  \nImproved debt management (including restricting new external financing to concessional terms), fiscal discipline, and resolution of arrears are projected to help all external liquidity and solvency indicators fall below their thresholds by 2026 under the baseline scenario.2 The completed domestic debt reprofiling and related maturity extensions are expected to partly postpone the amortization of government treasury obligations, thereby easing the debt service pressures from 2026 onwards. Several factors will help reduce the high debt-to-GDP ratio and reoccurrence of arrears  \n1 Most of the external debt is defined on a currency basis, except for the creditors whose residency can be tracked, which are defined on a residency basis. An example is the Regional Development Bank, BDEAC.  \n2 The composite index (CI), estimated at 2.3 and based on the October 2024 World Economic Outlook (WEO) and 2023 World Bank Country Policy and Institutional Assessment (CPIA) data, indicates a weak debt carrying capacity for Congo.  \nover the medium term, including softer but still robust oil prices in the near term (based on the November 2024 WEO assumptions) and resilient non-hydrocarbon growth supported by the authorities’ reform agenda.  \nNevertheless, there are major overall and external debt-related risks, as signaled by the PV of the public debt-to-GDP indicator exceeding its benchmark through 2033 as well as recurring accumulation of external arrears.3 Both domestic debt solvency and liquidity indicators point to debt vulnerabilities in the medium term. Even though the PV of overall public debt-to-GDP ratio breaches its benchmark extensively, it is assessed as sustainable given that the risks are mitigated by i) steady and significant declines in the relevant ratios going forward; and ii) expected accumulation of government deposits (CFAF 117 billion) at the Central Bank.  \nThere are several risks to debt sustainability. The debt sustainability assessment is highly vulnerable to downside risks to oil price shocks, which have intensified lately. Conditions in regional markets (CEMAC banking systems) may tighten further for the reasons beyond Congo’s control or if the government’s financing needs exceed the current baseline projections, exacerbating recent funding challenges.  \nGoing forward, the authorities should continue pursuing fiscal consolidation, enact policies for diversification to reduce risks and prepare for reduced long-term oil production and demand, clear domestic arrears, and continue enhancing debt management.4  \n1. The coverage of public debt in this DSA is limited to central government debt, including the oil-backed debts. Local governments in Congo are not allowed to borrow and depend on local taxes and transfers from the central government. Debt from oil-backed pre-financing arrangements contracted with oil traders ","cbCaifunvg4UVes6","https://ap.wps.com/l/cbCaifunvg4UVes6","pdf",1021893,1,34,"English","en",105,"# Risk Assessment Summary\n## Risk of External Debt Distress\n## Overall Risk of Debt Distress\n## Granularity in the Risk Rating\n# Basis for Classification\n## Restructuring and Arrears Resolution\n## Baseline Projections to 2026\n## Debt Management and Fiscal Measures\n# Medium-Term Vulnerabilities and Risks\n## Debt Service and Benchmark Breaches\n## External Arrears Recurrence\n## Downside Risks\n# Policy Recommendations\n## Fiscal Consolidation and Diversification\n## Clearing Domestic Arrears\n## Enhancing Debt Management","[{\"question\":\"How does the report classify Congo’s overall and external debt?\",\"answer\":\"Both overall and external debt are classified as “in debt distress.” At the same time, the assessment evaluates the debt as “sustainable.”\"},{\"question\":\"What factors are expected to improve external liquidity and solvency indicators by 2026?\",\"answer\":\"Improved debt management (including restricting new external financing to concessional terms), fiscal discipline, and resolution of arrears are projected to bring external indicators below their thresholds by 2026 under the baseline scenario.\"},{\"question\":\"What are the major risks to debt sustainability highlighted in the analysis?\",\"answer\":\"The assessment stresses high vulnerability to downside oil price shocks and the risk of recurring external arrears, alongside potential tightening of regional market financing conditions and funding 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