Key facts
- The World Bank's executive board approved reforms to the joint IMF-World Bank debt sustainability framework for low-income countries.
- The reforms aim to reflect a more complex and riskier global debt environment.
- The review recommended changes including better analysis of domestic debt.
- Broadening the analysis of long-term development challenges, including climate change, was also recommended.
The World Bank's executive board has approved proposed reforms to the bank's joint framework with the International Monetary Fund for evaluating the debt of low-income countries. The changes are intended to better reflect the increasingly complex and riskier global debt environment.
The joint review, the first since 2017, recommended several updates. These include enhancing the analysis of domestic debt and broadening the assessment of long-term development challenges, such as climate change.
The Debt Sustainability Framework for Low-Income Countries (LIC-DSF) is an analytical tool used by the IMF and World Bank to assess debt vulnerabilities, guide policy advice, and inform lending decisions for countries primarily relying on concessional financing. The framework was originally established in 2005 and is periodically reviewed and updated.