What is Debt Management and why is it important?

What is Debt Management and

why is it important?

Macroeconomic Working Group

Original presentation: Lars Jessen

29 June 2017

Vientiane, Lao PDR

What is this?

80

70

60

50

40

30

20

10

0

2013

2014

2015

2016

2017

2018

2019

2020

2

Lao PDR, public debt/GDP

80

70

60

50

40

30

20

10

0

2013

2014

2015

2016

External

2017

2018

2019

2020

Domestic

3

More background

? Debt level is relatively high :

¨C Risk to the debt size is high

¨C Risk to interest cost and the budget, relatively low due to high share

of debt with very low interest rate

? IMF Article IV, February 2017: ¡°Lao P.D.R.¡¯s risk of external

debt distress is reclassified from moderate to high,

suggesting the urgent need to tighten fiscal policy, strengthen

public financial management, and develop a comprehensive

medium-term debt management strategy¡±

? Access to concessional funding will gradually reduce ¨C

implication is higher cost, but more financial choices

4

Structure of public debt

2010

2015

Other

countries

23%

ADB

13%

ADB

31%

Bonds

0%

WBG

8%

Bonds

12%

Japan

4%

WBG

17%

Thailand

5%

China

20%

Other

countries

14%

Japan

1%

China

45%

Thailand

7%

5

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