Safe Debt and Uncertainty in Emerging Markets [electronic resource] : An Application to South Africa, Saxegaard, Magnus..
- Washington, D.C. : International Monetary Fund, 2014.
- IMF eLibrary
IMF Working Papers: Working Paper No. 14/231
- Government document
1 online resource (27 p.)
- Local subjects:
- Debt ceilings.
- This paper develops a methodology for estimating a safe public debt level that would allow countries to remain below a maximum sustainable debt limit, taking into account the impact of uncertainty. Our analysis implies that fiscal policy should target a debt level well below the debt ceiling to allow space to absorb shocks that are likely to hit the economy. To illustrate our findings we apply the methodology to estimate a safe debt level for South Africa. Our results suggest that South Africa's debt ceiling is around 60 percent of GDP, although uncertainty is high. Simulations suggest targeting a debt-to-GDP ratio of 40 percent of GDP would allow South Africa to remain below this debt ceiling over the medium-term with a high degree of confidence.
- Description based on print version record.
- Saxegaard, Magnus.
- Other format:
- Print Version:
- Publisher Number:
- Access Restriction:
- Restricted for use by site license.
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