Policy Dialogue on Debt and Financial Sustainability in the EFSD and CAREC Regions

Debt sustainability is a vital concern in low- and middle-income countries, particularly in oil-importing with low economic growth, high interest rates and limited revenue generating natural resources. Debt management is the priority policy choice for the CAREC countries to maintain their fiscal health. Nonetheless, the magnitude of external and internal shocks depends on domestic fiscal policy frameworks and choices. To overcome the COVID-19 and fiscal crises, the EFSD and CAREC countries must have good debt management strategies and debt transparency mechanisms. Reinforcement of monetary, exchange rate, and fiscal policy frameworks can safeguard CAREC countries’ debt sustainability.