[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-111816-en":3,"doc-seo-111816-105":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},111816,1374391974468,"Eden","https://ap-avatar.wpscdn.com/davatar_29158cc5080c5b710cf443261637dec0",8,"Research & Report","Tuvalu - Joint World Bank-IMF Debt Sustainability Analysis - External Debt Distress Risk High","Tuvalu remains at a high risk of external and overall debt distress, even though mechanical ratings are assessed as moderate in the first 10 years under the baseline. Judgment extends the projection horizon to 20 years to reflect natural disasters and climate change effects on debt dynamics. Long-run breaches of debt burden thresholds raise the final risk rating to high, while debt sustainability is deemed sustainable assuming continued concessional external budget support, low debt service ratios, and limited cash buffers to finance deficits. Key risks include elevated current spending, reliance on volatile fishing revenues and grants, and disaster exposure.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nManuela Francisco and Lalita Moorty (IDA) , and Corinne Deléchat and Jay Peiris (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF)1  \n\n| TUVALU: 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 | Yes. The projection horizon was extended to 20 years to capture the impact of natural disasters and climate change on debt dynamics. |\n\nTuvalu remains at a high risk of debt distress, unchanged from the 2023 Debt Sustainability Analysis (DSA) . Consistent with the previous DSA, judgment was applied to extend the projection horizon to 20 years as opposed to the standard 10 years to capture Tuvalu’s vulnerability to natural disasters and the effects of climate change on debt dynamics. Tuvalu is projected to face persistent fiscal deficits going forward. The mechanical external and overall risk rating is moderate based on the first 10 years of projections since none of the debt burden indicators breach their thresholds2 under the baseline, while the Present Values (PV) of external and public debt-to-GDP ratio breach their thresholds under the stress tests. However, these ratios are projected to breach thresholds under the baseline scenario in the long run , making the final external and overall risk of debt distress high. Despite upward trending debt burden indicators, Tuvalu’s debt is assessed as sustainable. This assessment assumes continued access to external budget support on concessional terms from development partners, low debt service ratios throughout the projection horizon, and some cash buffers in the Consolidated Investment Fund (CIF) to finance deficits. Risks to debt sustainability remain high due  \n1 This DSA has been prepared jointly by the IMF and World Bank, following the Guidance Note on the Bank-Fund Debt Sustainability Framework for Low Income Countries (2018) .  \n2 Tuvalu’s Composite Indicator (CI) index indicates that the country ’s debt-carrying capacity remains weak (2 .58) based on the IMF’s 2025 April World Economic Outlook (WEO) and the 2023 World Bank Country Policy and Institutional Assessment (CPIA) .  \nto elevated current spending, high reliance on volatile fishing revenues and grants, and risks of natural disasters. This underscores the importance of reining in fiscal deficits, improving public financial management and implementing structural reforms, ensuring good cooperation with donors , and securing grants needed to fulfill the country’s large development needs and climate adaptation efforts.  \n1. Tuvalu’s liabilities covered in this Debt Sustainability Analysis comprise debt of the budgetary central government and SOEs (Text Table 1) . Although Tuvalu does not compile government finance statistics at the general government level, a recent technical assistance report estimates that both revenue and expenditure of local governments are below 5 percent of budgetary central government.3 Tuvalu does not have a central bank. The data on domestic debt of the government and SOEs are from the National Bank of Tuvalu (NBT) , which is appropriate for debt sustainability analysis. The last guaranteed loan was settled in 2018, and there have been no new guarantees since then.4 The authorities , however, may be asked to step in and cover existing, non-guaranteed SOE loan obligations if an SOE were unable to fulfill, given that the corporations are wholly owned by the government. Thus, SOE debt is included in the baseline definition of public debt. The definition of external and domestic debt is based on residency. All external debt is on a concessional basis.  \n\n|  |  |  |\n| --- | --- | --- |\n| 1 | Subsectors of the public sector Sub-sectors covered |  |\n|  | Central government X |  |\n| 2 | State and local g","cbCaiibZXLLIEsjp","https://ap.wps.com/l/cbCaiibZXLLIEsjp","pdf",1197337,1,19,"English","en",105,"# Key Risk Assessment\n## External and Overall Risk Ratings\n## Role of Judgment and Projection Horizon\n# Baseline Assumptions and Sustainability View\n## Fiscal Deficits and Threshold Breaches\n## Financing Conditions and Cash Buffers\n# Debt Coverage and Data Sources\n## Public Debt Definition and Liability Scope\n## External vs Domestic Debt Basis\n# Debt Reporting, Transparency, and Monitoring\n## Budget Document Disclosures\n## Fiscal Risk Reporting and Domestic Data Collection\n# Contingent Liabilities Stress Test\n## Public Sector Exposure to Market Shocks\n## SOE, PPP, and Government-Guaranteed Treatment","[{\"question\":\"Why is the projection horizon extended to 20 years in Tuvalu’s analysis?\",\"answer\":\"Judgment extends the horizon to capture the impact of natural disasters and climate change on debt dynamics, rather than using the standard 10 years.\"},{\"question\":\"How do the baseline results differ from stress tests in the risk rating?\",\"answer\":\"Under the baseline, the first 10 years do not breach key debt burden thresholds, but present value debt ratios breach thresholds under stress tests; over the long run, thresholds are also breached under the baseline.\"},{\"question\":\"What assumptions support the conclusion that Tuvalu’s debt is sustainable despite high distress risk?\",\"answer\":\"The assessment relies on continued concessional external budget support, low debt service ratios across the projection period, and some cash buffers in the Consolidated Investment Fund to finance deficits.\"}]",1784491840,48,{"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":85,"head_meta":87,"extra_data":89,"updated_unix":27},"tuvalu-joint-world-bank-imf-debt-sustainability-analysis-external-debt-distress-risk-high","",{"@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/tuvalu-joint-world-bank-imf-debt-sustainability-analysis-external-debt-distress-risk-high/111816/",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},"Why is the projection horizon extended to 20 years in Tuvalu’s analysis?","Question",{"text":74,"@type":75},"Judgment extends the horizon to capture the impact of natural disasters and climate change on debt dynamics, rather than using the standard 10 years.","Answer",{"name":77,"@type":72,"acceptedAnswer":78},"How do the baseline results differ from stress tests in the risk rating?",{"text":79,"@type":75},"Under the baseline, the first 10 years do not breach key debt burden thresholds, but present value debt ratios breach thresholds under stress tests; over the long run, thresholds are also breached under the baseline.",{"name":81,"@type":72,"acceptedAnswer":82},"What assumptions support the conclusion that Tuvalu’s debt is sustainable despite high distress risk?",{"text":83,"@type":75},"The assessment relies on continued concessional external budget support, low debt service ratios across the projection period, and some cash buffers in the Consolidated Investment Fund to finance deficits.","https://schema.org",{"og:url":51,"og:type":86,"og:title":13,"og:site_name":58,"og:description":14},"article",{"robots":88,"canonical":51},"index,follow",{"doc_id":7,"site_id":24},{"code":4,"msg":5,"data":91},[92,96,100,104,109,114,119,122,127,130,134],{"id":20,"doc_module":4,"doc_module_name":45,"category_name":93,"show_sort_weight":94,"slug":95},"Story & Novel",90,"story-novel",{"id":46,"doc_module":4,"doc_module_name":45,"category_name":97,"show_sort_weight":98,"slug":99},"Literature",80,"literature",{"id":52,"doc_module":4,"doc_module_name":45,"category_name":101,"show_sort_weight":102,"slug":103},"Exam",70,"exam",{"id":105,"doc_module":4,"doc_module_name":45,"category_name":106,"show_sort_weight":107,"slug":108},5,"Comic",60,"comic",{"id":110,"doc_module":4,"doc_module_name":45,"category_name":111,"show_sort_weight":112,"slug":113},6,"Technology",50,"technology",{"id":115,"doc_module":4,"doc_module_name":45,"category_name":116,"show_sort_weight":117,"slug":118},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":45,"category_name":12,"show_sort_weight":120,"slug":121},30,"research-report",{"id":123,"doc_module":4,"doc_module_name":45,"category_name":124,"show_sort_weight":125,"slug":126},9,"Religion & Spirituality",20,"religion-spirituality",{"id":125,"doc_module":4,"doc_module_name":45,"category_name":128,"show_sort_weight":125,"slug":129},"World Cup","world-cup",{"id":131,"doc_module":4,"doc_module_name":45,"category_name":132,"show_sort_weight":131,"slug":133},10,"Lifestyle","lifestyle",{"id":21,"doc_module":4,"doc_module_name":45,"category_name":135,"show_sort_weight":105,"slug":136},"General","general"]