Debt indicators
From The World Bank: Global Development FinanceThe macroeconomic
aggregates and debt data provided in the tables are used to generate ratios that analysts
use to assess the external situations of developing countries. Different analysts give
different weights to these indicators, but no single indicator or set of indicators can
substitute for a thorough analysis of the overall situation of an economy. The advantage
of the indicators in Global Development Finance is that they are calculated from
standardized data series that are compiled on a consistent basis by the World Bank and the
IMF. The ratios offer various measures of the cost of, or capacity for, servicing debt in
terms of the foreign exchange or output forgone. The following ratios are provided based
on total external debt:
- EDT/XGS is total external debt to exports of goods and services (including
workers remittances).
EDT/GNP is total external debt to gross national
product.
TDS/XGS, also called the debt service ratio, is total debt service to exports of
goods and services (including workers remittances).
INT/XGS, also called the interest service ratio, is total interest payments to
exports of goods and services (including workers remittances).
INT/GNP is total interest payments to gross national product.
RES/EDT is international reserves to total external debt.
RES/MGS is international reserves to imports of goods and services.
Short-term/EDT is short-term debt to total external debt.
Concessional/EDT is concessional debt to total external debt.
Multilateral/EDT is multilateral debt to total external debt.
Long-term debt
Data on long-term debt include eight main elements:
- Debt Oustanding and Disbursed is the total outstanding debt at year end.
Disbursements
are drawings on loan commitments by the borrower during the year.
Principal Repayments are amounts paid by the borrower during the year.
Net Flows received by the borrower during the year are disbursements minus
principal repayments.
Interest Payments are amounts paid by the borrower during the year.
Net Transfers are net flows minus interest payments during the year; negative
transfers show net transfers made by the borrower to the creditor during the year.
Debt Service (LTDS) is the sum of principal repayments and interest payments
actually made.
Undisbursed Debt is total debt undrawn at year end; data for private
nonguaranteed debt are not available.
Data from individual reporters are aggregated by type of creditor. Official
creditors includes multilateral and bilateral debt.
- Loans from multilateral organizations are loans and credits from the World Bank,
regional development banks, and other multilateral and intergovernmental agencies.
Excluded are loans from funds administered by an international organization on behalf of a
single donor government; these are classified as loans from governments.
- Bilateral loans are loans from governments and their agencies (including central
banks), loans from autonomous bodies, and direct loans from official export credit
agencies.
- Private creditors include bonds, commercial banks, and other private creditors.
Commercial banks and other private creditors comprise bank and trade-related lending.
- Bonds include publicly issued or privately placed bonds.
- Commercial banks are loans from private banks and other private financial
institutions.
- Other private includes credits from manufacturers, exporters, and other suppliers
of goods, and bank credits covered by a guarantee of an export credit agency.
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Four characteristics of a countrys debt are given as memorandum items for
long-term debt outstanding and disbursed (LDOD).
Concessional LDOD conveys information about the borrowers receipt of aid
from official lenders at concessional terms as defined by the DAC, that is, loans with an
original grant element of 25 percent or more. Loans from major regional development
banksAfrican Development Bank, Asian Development Bank, and the Inter-American
Development Bankand from the World Bank are classified as concessional according to
each institutions classification and not according to the DAC definition, as was the
practice in earlier reports.
Variable interest rate LDOD is long-term debt with interest rates that float
with movements in a key market rate such as the London interbank offer rate (LIBOR) or the
U.S. prime rate. This item conveys information about the borrowers exposure to
changes in international interest rates.
Public sector LDOD and private sector LDOD convey information about the
distribution of long-term debt for DRS countries by type of debtor (central government,
state and local government, central bank; private bank, private debt).
Currency
composition of long-term debt
The six major currencies in which the external debt of low- and middle-income countries
is contracted are separately identified, as is debt denominated in special drawing rights
and debt repayable in multiple currencies.
Debt restructurings
Debt restructurings include restructurings in the context of the Paris Club, commercial
banks, debt-equity swaps, buybacks, and bond exchanges. Debt restructuring data capture
the noncash or inferred flows associated with rescheduling and restructuring. These are
presented to complement the cash-basis transactions recorded in the main body of the data.
- Debt stock rescheduled is the amount of debt outstanding rescheduled in any given
year.
Principal rescheduled is the amount of principal due or in arrears that
was rescheduled in any given year.
Interest rescheduled is the amount of interest due or in arrears that was
rescheduled in any given year.
Debt forgiven is the amount of principal due or in arrears that was written off
or forgiven in any given year.
Interest forgiven is the amount of interest due or in arrears that was written
off or forgiven in any given year.
Debt stock reduction is the amount that has been netted out of the stock of debt
using debt conversion schemes such as buybacks and equity swaps or the discounted value of
long-term bonds that were issued in exchange for outstanding debt.
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Debt stock-flow
reconciliation
Stock and flow data on total external debt are reconciled for each year, beginning with
1989. The data show the changes in stock that have taken place due to the net flow on
debt, the net change in interest arrears, the capitalization of interest, the reduction in
debt resulting from debt forgiveness or other debt reduction mechanisms, and the
cross-currency valuation effects. The residual differencethe change in stock not
explained by any of these factorsis also presented, calculated as the sum of
identified accounts minus the change in stock.
Average terms of
new commitments
The average terms of borrowing on public and publicly guaranteed debt are given for all
new loans contracted during the year and separately for loans from official and private
creditors. To obtain averages, the interest rates, maturities, and grace periods in each
category have been weighted by the amounts of the loans. The grant equivalent of a loan is
its commitment (present) value, less the discounted present value of its contractual debt
service; conventionally, future service payments are discounted at 10 percent. The grant
element of a loan is the grant equivalent expressed as a percentage of the amount
committed. It is used as a measure of the overall cost of borrowing. Loans with an
original grant element of 25 percent or more are defined as concessional. The average
grant element has been weighted by the amounts of the loans.
Commitments cover the total amount of loans for which contracts were signed in the year
specified; data for private nonguaranteed debt are not available.
Projections on
existing pipeline
Projected debt service payments are estimates of payments due on existing debt
outstanding, including undisbursed. They do not include service payments that may become
due as a result of new loans contracted in subsequent years. Nor do they allow for effects
on service payments of changes in repayment patterns owing to prepayment of loans or to
rescheduling or refinancing, including repayment of outstanding arrears, that occurred
after the last year of reported data.
Projected disbursements are estimates of drawings of unutilized balances. The
projections do not take into account future borrowing by the debtor country. See
Methodology section for a detailed explanation of the methods of projecting undisbursed
balances.
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Exchange rates
Data received by the World Bank from its members are expressed in the currencies in
which the debts are repayable or in which the transactions took place. For aggregation,
the Bank converts these amounts to U.S. dollars using the IMF par values or central rates,
or the current market rates where appropriate. Service payments, commitments, and
disbursements (flows) are converted to U.S. dollars at the average rate for the year. Debt
outstanding and disbursed at the end of a given year (a stock) is converted at the rate in
effect at the end of that year. Projected debt service, however, is converted to U.S.
dollars at rates in effect at end-December 1996. Debt repayable in multiple currencies,
goods, or services and debt with a provision for maintenance of value of the currency of
repayment are shown at book value.
Adjustments
Year-to-year changes in debt outstanding and disbursed are sometimes not equal to net
flows; similarly, changes in debt outstanding, including undisbursed, differ from
commitments less repayments. The reasons for these differences are cancellations,
adjustments caused by the use of different exchange rates, and the rescheduling of other
liabilities into long-term public debt.
Symbols
The following symbols have been used throughout:
0.0 indicates that a datum exists, but is negligible, or is a true zero.
.. indicates that a datum is not available.
Dollars are current U.S. dollars unless otherwise specified. |