[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-110083-en":3,"doc-seo-110083-105":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},110083,1099513958762,"Logic","https://ap-avatar.wpscdn.com/avatar/1000023916a998db790?x-image-process=image/resize,m_fixed,w_180,h_180&k=1784791008015729253",8,"Research & Report","Vanuatu: Joint Bank-Fund Debt Sustainability Analysis - Moderate debt distress risk","The 2023 Debt Sustainability Analysis for Vanuatu assesses the risk of debt distress as moderate for both external debt and overall public debt, with limited capacity to absorb shocks. External debt stock and liquidity indicators remain below benchmarks in the baseline scenario due to concessional borrowing, but are vulnerable to natural disasters and macroeconomic shocks. A severe downside scenario involving a full loss of Economic Citizenship Program revenues would likely push three external debt indicators above benchmarks. Over the long term, public debt stock and public debt service costs are projected to rise, increasing reliance on domestic borrowing and highlighting the need to rebuild fiscal space and strengthen resilience.","Public Disclosure Authorized  \nPub lic Disc losure Authorized  \nApproved by:  \nHassan Zaman and Manuela Francisco (IDA) and Era Dabla-Norris and Maria Gonzalez (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF)  \n\n| VANUATU: 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 | Limited space to absorb shocks |\n| Application of judgment | No |\n\nThe 2023 Debt Sustainability Analysis (DSA) indicates that the risk of debt distress for Vanuatu remains moderate for both external and overall public debt, with limited space to absorb shocks; the rating is unchanged from the 2021 DSA.1 External debt stock and liquidity indicators remain below their benchmark levels in the baseline scenario, given the concessional nature of Vanuatu’s external borrowing, but stock indicators are vulnerable to natural disasters and macroeconomic shocks. A severe downside scenario with a full loss of Economic Citizenship Program (ECP) revenues would likely cause three external debt indicators to breach their benchmarks. The public debt stock and public debt service costs are forecast to grow over the long term, with increasing reliance on domestic borrowing necessitating the development of domestic debt markets. In light of these results, it is essential for Vanuatu to rebuild fiscal space and enhance resilience against shocks. Formulating a medium-term fiscal strategy with robust revenue mobilization and expenditure rationalization measures is essential to preserve sustainability and create space for growth-critical infrastructure. When financing new infrastructure, the authorities are encouraged to continue seeking grants and concessional loans.  \n1 The composite indicator for Vanuatu is estimated at 2.99, based on October 2022 WEO and 2021 World Bank CPIA, indicating a medium debt carrying capacity.  \n1. The coverage of public sector debt for this DSA is central government debt, central government guaranteed debt, and central bank debt borrowed on behalf of the government. The debt of Air Vanuatu is not included due to lack of data. Staff plans to work with the authorities based on information from ongoing and planned assessments by Australia’s DFAT and the IFC (see Staff Report), and Air Vanuatu’s updated financial statements, to address missing information on debt stock and flows in order to incorporate the debt of Air Vanuatu into the stock of government debt in the next DSA, if the SOE continues to pose significant fiscal risks (see paragraph 2) . Because of data limitations, other elements in the general government, other non-guaranteed state-owned enterprise (SOE) debt, and private external debt are also not included in the analysis.2 Given the limited capacity of Vanuatu’s state and local governments, SOEs, and the private sector to borrow either externally or domestically, data deficiencies are not expected to affect the overall assessment. PFTAC continues to provide technical assistance to help the authorities expand the coverage of government financial statistics (GFS) from budgetary central government to general government and SOEs. The DSA uses a residency-based definition of external debt.  \n\n| Coverage of Public Sector Debt |  |\n| --- | --- |\n| 1 | Subsectors of the public sector Sub-sectors covered |\n|  | Central government X |\n| 2 | State and local government |\n| 3 | Other elements in the general government |\n| 4 | o/w: Social security fund |\n| 5 | o/w: Extra budgetary funds (EBFs) |\n| 6 | Guarantees (to other entities in the public and private sector, including to SOEs) X |\n| 7 | Central bank (borrowed on behalf of the government) X |\n| 8 | Non-guaranteed SOE debt |\n\n2. The DSA includes a combined contingent liabilities stress test. Contingent liability risks mostly stem from the financially distressed national air carrier, Air Vanu","cbCaiejVNWmEWnWT","https://ap.wps.com/l/cbCaiejVNWmEWnWT","pdf",630274,6,1,20,"English","en",105,"# Key risk ratings\n## External and overall debt distress\n## Granularity and judgment\n# Baseline and downside scenarios\n## Baseline concessional borrowing\n## Economic Citizenship Program revenue shock\n# Medium-term policy implications\n## Rebuilding fiscal space and resilience\n## Revenue mobilization and expenditure rationalization\n# Debt coverage and contingent liabilities","[{\"question\":\"What is Vanuatu’s assessed risk of external debt distress and overall debt distress?\",\"answer\":\"Both external and overall public debt distress risks are rated moderate. The rating remains unchanged from the 2021 Debt Sustainability Analysis.\"},{\"question\":\"What factors drive vulnerability in the external debt assessment?\",\"answer\":\"External debt indicators are below benchmarks in the baseline scenario, reflecting concessional borrowing, but they remain vulnerable to natural disasters and macroeconomic shocks.\"},{\"question\":\"How could a loss of Economic Citizenship Program revenues affect debt indicators?\",\"answer\":\"A severe downside scenario with a full loss of Economic Citizenship Program revenues would likely cause three external debt indicators to breach their benchmarks.\"}]","Vanuatu: Joint Bank-Fund Debt Sustainability Analysis - Moderate debt distress risk | PDF",1784483829,50,{"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},"vanuatu-joint-bank-fund-debt-sustainability-analysis-moderate-debt-distress-risk","",{"@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/vanuatu-joint-bank-fund-debt-sustainability-analysis-moderate-debt-distress-risk/110083/",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 is Vanuatu’s assessed risk of external debt distress and overall debt distress?","Question",{"text":77,"@type":78},"Both external and overall public debt distress risks are rated moderate. The rating remains unchanged from the 2021 Debt Sustainability Analysis.","Answer",{"name":80,"@type":75,"acceptedAnswer":81},"What factors drive vulnerability in the external debt assessment?",{"text":82,"@type":78},"External debt indicators are below benchmarks in the baseline scenario, reflecting concessional borrowing, but they remain vulnerable to natural disasters and macroeconomic shocks.",{"name":84,"@type":75,"acceptedAnswer":85},"How could a loss of Economic Citizenship Program revenues affect debt indicators?",{"text":86,"@type":78},"A severe downside scenario with a full loss of Economic Citizenship Program revenues would likely cause three external debt indicators to breach their benchmarks.","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},[95,99,103,107,112,115,120,123,127,130,134],{"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":108,"doc_module":4,"doc_module_name":47,"category_name":109,"show_sort_weight":110,"slug":111},5,"Comic",60,"comic",{"id":20,"doc_module":4,"doc_module_name":47,"category_name":113,"show_sort_weight":30,"slug":114},"Technology","technology",{"id":116,"doc_module":4,"doc_module_name":47,"category_name":117,"show_sort_weight":118,"slug":119},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":47,"category_name":12,"show_sort_weight":121,"slug":122},30,"research-report",{"id":124,"doc_module":4,"doc_module_name":47,"category_name":125,"show_sort_weight":22,"slug":126},9,"Religion & Spirituality","religion-spirituality",{"id":22,"doc_module":4,"doc_module_name":47,"category_name":128,"show_sort_weight":22,"slug":129},"World Cup","world-cup",{"id":131,"doc_module":4,"doc_module_name":47,"category_name":132,"show_sort_weight":131,"slug":133},10,"Lifestyle","lifestyle",{"id":135,"doc_module":4,"doc_module_name":47,"category_name":136,"show_sort_weight":108,"slug":137},19,"General","general"]