Asian Perspectives on Sovereign Debt and Managing Fiscal Risks
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Debt sustainability risks in developing economies have amplified in recent years in the aftermath of the coronavirus disease (COVID-19) pandemic. Fiscal support packages implemented due to the pandemic led to higher stocks of public debt, while tighter global monetary conditions in 2022 and 2023 increased the cost of financing public debt, widening fiscal deficits. Managing the inflationary effects of pandemic-related fiscal expansions, global supply chain disruptions, and the commodity price ramifications of the Russian Federation’s invasion of Ukraine created significant challenges for policy makers. These challenges were compounded by the ongoing need to address climate risks with appropriate adaptation and mitigation measures, placing further strain on the sustainability of public debt.
Asian Perspectives on Sovereign Debt and Managing Fiscal Risks highlights the role of fiscal policy as an effective tool in crisis times while also drawing insights on the implications for prudent public debt management and fiscal resilience. With a focus on Asian economies, the book provides guidance to policy makers on reducing debt vulnerabilities and maximizing the capacity of fiscal policy to respond to shocks. The discussions highlight the importance of well-coordinated fiscal and monetary policies, as well as enhancing efforts on tax revenue generation and mobilizing domestic financial resources. The book also describes fiscal framework design that incorporates risk factors, supported by adequate fiscal buffers and credible macroeconomic assumptions in conjunction with a well-anchored fiscal path. Finally, it stresses the role of accountability and transparency in fiscal governance as central to effective public debt management.
- 1. IntroductionJohn Beirne and Dongsoo Kang
- Part I: Debt Sustainability in Asian Economies
- 2. Construction of an Index Tracker for Debt Sustainability Assessment in the PhilippinesArmin Paul D. Allado, Lance Nicklaus S. Lim, Nerie Angelie T. Tulauan, Marvin Kyle M.Abreu, Patricia Louise M. Agabin, and Joaquin Charles D. Regio
- 3. To Borrow or Not to Borrow: Empirical Evidence from the Public Debt Sustainability of PakistanWajid Islam and Junaid Ahmed
- 4. Indonesia’s Fiscal Capacity and Burden-Sharing Scheme: New Insight from Handling COVID-19Pihri Buhaerah and Nur Firdaus
- 5. Policy Responses to Cope with COVID-19 in Viet Nam: An Empirical Stock-Flow Consistent ApproachThi Thu Ha Nguyen, Etienne Espagne, Luis Reyes, and Thi Anh-Dao Tran
- Part II: Fiscal Risks and Policy Implications after the Pandemic
- 6. Sovereign Debt Vulnerabilities in Asia and the PacificBenno Ferrarini, Suzette Dagli, and Paul Mariano
- 7. Debt and Fiscal Risks: Managing Shocks and SurprisesPaulo Medas, John Ralyea, and Xuehui Han
- 8. Impact of Climate Change on Sovereign Risk in AsiaS.P. Jayasooriya
- 9. Examining Monetary Spillover from the United States to Indonesian Local Currency Government Bonds in Volatile PeriodsMuhammad Fajar Nugraha