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What Policy-Makers Should Watch for in the Review of the Low-Income Country Debt Sustainability Framework
This policy brief by the International Institute for Sustainable Development (IISD) analyzes the 2026 review of the Low-Income Country Debt Sustainability Framework (LIC-DSF) conducted by the IMF and World Bank. While the authors welcome improvements regarding domestic debt and country heterogeneity, they argue that the framework fails to distinguish between public debt sustainability and external sustainability. The brief recommends that policy-makers use the revised LIC-DSF primarily as a public debt sustainability analysis (DSA) tool and pair it with a separate, dedicated external sustainability framework to avoid ambiguous policy signals.
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Document type: Policy brief