Introduced in 2005 and most recently updated in 2017, the joint World Bank–International Monetary Fund (IMF) Low-Income Country Debt Sustainability Framework (LIC-DSF) has been a cornerstone of debt sustainability analysis in IDA-eligible countries.
This evaluation is intended to provide input and insight into the upcoming World Bank–IMF review of the LIC-DSF. It assesses the World Bank’s inputs into the LIC-DSF and how the World Bank uses LIC-DSF outputs to inform various corporate and country-level decisions. The evaluation seeks to identify lessons that point to opportunities for the World Bank to strengthen its role in the preparation and use of the LIC-DSF in a changing global landscape.
Based on evaluation findings, IEG makes 4 recommendations.
Additionally, the upcoming joint World Bank–IMF review of the LIC-DSF offers several opportunities to strengthen the LIC-DSF more broadly. The report points to issues that could be considered for the joint review including enhancing preparation and approval procedures to ensure that Debt Sustainability Analyses (DSAs) are produced on a timely basis; incorporating concessional financing assumptions in DSAs; and strengthening the use of realism tools for longer-term projections, including with respect to climate change impacts.