[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-109866-en":3,"doc-seo-109866-105":31,"detail-sidebar-cat-0-en-105":93},{"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":21,"is_downloadable":21,"audit_status":21,"page_count":22,"language":23,"language_code":24,"site_id":25,"html_lang":24,"table_of_contents":26,"faqs":27,"seo_title":28,"seo_description":14,"update_tm":29,"read_time":30},109866,962075114101,"Seraphina","https://ap-avatar.wpscdn.com/avatar/e000253a75eb197efd?x-image-process=image/resize,m_fixed,w_180,h_180&k=1780044092746381165",8,"Research & Report","Tonga - Joint World Bank-IMF Debt Sustainability Analysis - January 2021","Tonga’s joint World Bank–IMF debt sustainability analysis assesses high overall and external debt distress risk, while granularity in the rating is marked as sustainable. External debt distress is expected to remain high as the pandemic-driven decline in exports may breach the indicative threshold in FY2021. Without new grant commitments, external solvency indicators and the public debt-to-GDP ratio are projected to breach thresholds starting in FY2029, alongside worsening fiscal conditions and rising repayments.","Public Disclosure Authorized Public Disclosure Authorized  \nINTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL MONETARY FUND  \nTONGA  \nJoint World Bank-IMF Debt Sustainability Analysis  \nJanuary 2021  \nPrepared jointly by the staffs ofthe International Development Association (IDA)  \nand the International Monetary Fund (IMF)  \nApproved by Marcello Estevão (IDA), Ranil Salgado and Geremia Palomba (IMF)  \n\n| Tonga: Joint Bank-Fund Debt Sustainability Analysis |  |\n| --- | --- |\n| Risk of external debt distress | High |\n| Overall risk of debt distress | High |\n| Granularity in the risk rating | Sustainable |\n| Application of judgment | No |\n\nThe risk of debt distress rating for Tonga has been maintained at high.1Tonga’s indebtedness has gradually declined since end-FY20152 as a much-needed fiscal consolidation started in FY2016 and continued through FY2020 notwithstanding the Covid-19 pandemic. The present value (PV) of the external debt-to-exports ratio is expected to temporarily breach the indicative threshold under the baseline scenario in FY2021 mainly due to the decline of exports triggered by the pandemic. Moreover, without new grant commitments, both external solvency indicators (i.e., the PV of the external debt-to-GDP ratio and of the external debt-to-exports ratio) are expected to breach their respective thresholds under the baseline scenario starting in FY2029, reflecting the deteriorating fiscal position due to the pandemic, large spending needs, lower grant inflows as existing commitments are fully disbursed, and rising debt repayments to multilateral development banks and China Eximbank over the medium-and long-term. The PV of the public debt-to-GDP ratio is expected to breach the benchmark starting from FY2029 under the baseline scenario. A tailored one-time natural disaster shock would imply a significant deterioration in debt sustainability. Long-term debt sustainability hinges on fiscal adjustment and continued donor grant inflows and debt relief to finance the substantial fiscal and external gaps. Under such policies, continued grant financing consistent with historical levels would help stabilize external debt dynamics. To rebuild fiscal buffers and enhance resilience against shocks, stronger revenue mobilization measures, expenditure rationalization, and effective debt management strategies are needed.  \n1 The Tonga Composite Indicator (CI) index, calculated on the basis of the October 2020 World Economic Outlook (WEO) and the 2019 Country Policy and Institutional Assessment (CPIA) released in July 2020, is at 3.12, indicating that Tonga’s debt-carrying capacity is strong. The classification of debt-carrying capacity has shifted from moderate to strong compared to the 2017 debt sustainability analysis (DSA) after confirmation of the change based on both the October 2018 and April 2019 WEO vintages (two consecutive signals are required for a shift in capacity classification (“Guidance Note on the Bank-Fund Debt Sustainability Framework for Low-income Countries”([http://www.imf.org/en/Publications/Policy-Papers/Issues/2018/02/14/pp122617guidance](http://www.imf.org/en/Publications/Policy-Papers/Issues/2018/02/14/pp122617guidance)note-on-lic-dsf)) .  \n2 All the figures are computed using fiscal year beginning in July, e.g., FY2020 runs from July 1, 2019 to June 30, 2020.  \nPUBLIC DEBT COVERAGE  \n1. Tonga’s public debt includes obligations of the central government and central bank. The central bank’s debt is borrowed on behalf of the government. Local governments do not incur debt, nordo other entities in the general government. As of end-June 2020, government-guaranteed debt was small, about 1 percent of GDP. Since the DSA coverage does not include debt of guaranteed and non-guaranteed state-owned enterprises, an additional 2 percent of GDP is added to the contingent liability test. Contingent liabilities also include a standard 5 percent of GDP cost to the government of a financial crisis, which is above the ","cbCaicQq2Ctedtus","https://ap.wps.com/l/cbCaicQq2Ctedtus","pdf",419444,5,1,17,"English","en",105,"# Risk of debt distress\n## External and overall risk assessment\n## Threshold breaches and baseline projections\n# Public debt coverage\n## Definition of covered subsectors\n## Contingent liabilities and adjustments\n# Background on debt\n## Fiscal consolidation and debt dynamics\n## Fiscal anchors and external borrowing","[{\"question\":\"What does the analysis conclude about Tonga’s risk of debt distress?\",\"answer\":\"The analysis rates both the external debt distress risk and the overall risk of debt distress as high, with granularity in the risk rating assessed as sustainable.\"},{\"question\":\"Why is the indicative threshold expected to be breached in FY2021?\",\"answer\":\"The present value of the external debt-to-exports ratio is expected to temporarily breach the indicative threshold under the baseline scenario in FY2021 mainly due to the pandemic-triggered decline in exports.\"},{\"question\":\"When are debt solvency indicators projected to breach thresholds without new grant commitments?\",\"answer\":\"Both external solvency indicators—covering the PV of external debt-to-GDP and external debt-to-exports—are expected to breach their respective thresholds under the baseline scenario starting in FY2029.\"}]","Tonga - Joint World Bank-IMF Debt Sustainability Analysis - January 2021 | PDF",1784482765,43,{"code":4,"msg":32,"data":33},"ok",{"site_id":25,"language":24,"slug":34,"title":13,"keywords":35,"description":14,"schema_data":36,"social_meta":88,"head_meta":90,"extra_data":92,"updated_unix":29},"tonga-joint-world-bank-imf-debt-sustainability-analysis-january-2021","",{"@graph":37,"@context":87},[38,55,70],{"@type":39,"itemListElement":40},"BreadcrumbList",[41,45,49,52],{"item":42,"name":43,"@type":44,"position":21},"https://docshare.wps.com","Home","ListItem",{"item":46,"name":47,"@type":44,"position":48},"https://docshare.wps.com/document/","Document",2,{"item":50,"name":12,"@type":44,"position":51},"https://docshare.wps.com/document/research-report/",3,{"item":53,"name":13,"@type":44,"position":54},"https://docshare.wps.com/document/tonga-joint-world-bank-imf-debt-sustainability-analysis-january-2021/109866/",4,{"url":53,"name":13,"@type":56,"author":57,"headline":13,"publisher":59,"fileFormat":62,"inLanguage":24,"description":14,"dateModified":63,"datePublished":64,"encodingFormat":62,"isAccessibleForFree":65,"interactionStatistic":66},"DigitalDocument",{"name":9,"@type":58},"Person",{"url":42,"name":60,"@type":61},"DocShare","Organization","application/pdf","2026-07-30","2026-07-19",true,{"@type":67,"interactionType":68,"userInteractionCount":20},"InteractionCounter",{"@type":69},"ViewAction",{"@type":71,"mainEntity":72},"FAQPage",[73,79,83],{"name":74,"@type":75,"acceptedAnswer":76},"What does the analysis conclude about Tonga’s risk of debt distress?","Question",{"text":77,"@type":78},"The analysis rates both the external debt distress risk and the overall risk of debt distress as high, with granularity in the risk rating assessed as sustainable.","Answer",{"name":80,"@type":75,"acceptedAnswer":81},"Why is the indicative threshold expected to be breached in FY2021?",{"text":82,"@type":78},"The present value of the external debt-to-exports ratio is expected to temporarily breach the indicative threshold under the baseline scenario in FY2021 mainly due to the pandemic-triggered decline in exports.",{"name":84,"@type":75,"acceptedAnswer":85},"When are debt solvency indicators projected to breach thresholds without new grant commitments?",{"text":86,"@type":78},"Both external solvency indicators—covering the PV of external debt-to-GDP and external debt-to-exports—are expected to breach their respective thresholds under the baseline scenario starting in FY2029.","https://schema.org",{"og:url":53,"og:type":89,"og:title":13,"og:site_name":60,"og:description":14},"article",{"robots":91,"canonical":53},"index,follow",{"doc_id":7,"site_id":25},{"code":4,"msg":5,"data":94},[95,99,103,107,111,116,121,124,129,132,136],{"id":21,"doc_module":4,"doc_module_name":47,"category_name":96,"show_sort_weight":97,"slug":98},"Story & Novel",90,"story-novel",{"id":48,"doc_module":4,"doc_module_name":47,"category_name":100,"show_sort_weight":101,"slug":102},"Literature",80,"literature",{"id":54,"doc_module":4,"doc_module_name":47,"category_name":104,"show_sort_weight":105,"slug":106},"Exam",70,"exam",{"id":20,"doc_module":4,"doc_module_name":47,"category_name":108,"show_sort_weight":109,"slug":110},"Comic",60,"comic",{"id":112,"doc_module":4,"doc_module_name":47,"category_name":113,"show_sort_weight":114,"slug":115},6,"Technology",50,"technology",{"id":117,"doc_module":4,"doc_module_name":47,"category_name":118,"show_sort_weight":119,"slug":120},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":47,"category_name":12,"show_sort_weight":122,"slug":123},30,"research-report",{"id":125,"doc_module":4,"doc_module_name":47,"category_name":126,"show_sort_weight":127,"slug":128},9,"Religion & Spirituality",20,"religion-spirituality",{"id":127,"doc_module":4,"doc_module_name":47,"category_name":130,"show_sort_weight":127,"slug":131},"World Cup","world-cup",{"id":133,"doc_module":4,"doc_module_name":47,"category_name":134,"show_sort_weight":133,"slug":135},10,"Lifestyle","lifestyle",{"id":137,"doc_module":4,"doc_module_name":47,"category_name":138,"show_sort_weight":20,"slug":139},19,"General","general"]