2024年10月全球財政監(jiān)測報告

CHAPTER

PUTTINGALIDONPUBLICDEBT

1

Introduction

Publicdebtlevelsareelevatedaroundtheworld

thedebtbuildupsinemergingmarketanddevelopingeconomies(Comelliandothers2023;Schusterand

others2024).Materializationoftheseupsideriskstoalreadyhighdebtlevelsinmanypartsoftheworldposessignificantconcerns.

Highdebtreducesfiscalspaceandthegovernments’abilitytorespondtoeconomicdownturns,crowdsoutnecessarygrowth-enhancinginvestments,andraises

theriskofsovereigndistress(Brunnermeierandothers2016;BrunnermeierandReis2023;Mitchenerand

Tresbesch2023;FarhiandTirole2018).Notably,

sustaineddebtbuildupscanraisetheprobability

ofdebtdistressorbroaderfinancialcrisis(Kose

andothers2021).Evenincountrieswheredebtis

projectedtodecline,plannedfiscaladjustmentsremainuncertain,andpublicdebtisexpectedtoremainwellaboveprepandemiclevels.Further,thesecountries

areexposedtoadverserealandfinancialspillovers

fromelevateddebtanduncertaintysurroundingfiscalpoliciesinsystemicallyimportanteconomies.2

Againstthisbackdrop,thischapteranswersthefollowingquestions:

1.Whatisthedistributionofrisksaroundbaselineprojectionsforpublicdebt?

2.Howshouldcountriesthatneedtogetpublic

debtundercontrolconductfiscalpolicy?How

shouldtheydesignfiscaladjustments—intermsofsize,pace,andcomposition—tostrengthendebt

sustainabilitywhilelimitingtheiradverseimpactonoutputandincomedistribution?

3.Howcangovernmentstackleunidentifieddebt?

Thechapteremploysnewdataandmodeling

techniquestoanswerthesequestions.Thesearethekeyfindings:

?Distributionofrisksaroundthebaselinepublicdebtprojections.Anovelunified“debt-at-risk”frameworkisusedtoassesstheriskssurroundingbaselinedebtprojectionsandhowtheyvaryacrosscountriesandovertime.Theanalysissuggeststhatchangesin

2Indeed,evidencesuggeststhatuncertaintysurroundingUSfiscalpolicydrivestheglobalfinancialcycleinanimportantway,even

aftercontrollingforUSmonetarypolicyshocks(Hong,Ke,andNguyen2024).

andexpectedtoexceed$100trillionin2024.Afteradeclinein2021?22,globalpublicdebtedgedupagainin2023andisprojectedtoapproach100percentofGDPby2030,withtheworld’stwolargesteconomies,ChinaandtheUnitedStates,largelydrivingthe

increase.Althoughdebtisprojectedtostabilizeor

declineby2029inabouttwo-thirdsoftheworld’s

countries,itremainshigherthanbeforethepandemic(Figure1.1).1

Significantupsideriskstothisbaselineoutlook

implythatdebtlevelscouldbeevenhigherthan

currentlyprojected.Thepoliticaldiscourseon

fiscalissueshasincreasinglytiltedtowardhigher

governmentspendingoverthelastthreedecades

(Cao,Dabla-Norris,andDiGregorio2024).Fiscal

policyuncertaintyhasincreased(Hong,Ke,and

Nguyen2024).Further,mountingspendingpressures(forexample,forthegreentransition,defense,

costlyindustrialpolicies,populationaging,andUN

SustainableDevelopmentGoals)—notfullyaccountedforincurrentdebtprojections—arelikelytoleadtoafurtherbuildupofpublicdebt.

Asitis,debtprojectionsaresubjecttoan

optimismbias.Pastexperienceshowsthattheytendtosystematicallyunderestimatedebtlevels:realizeddebt-to-GDPratiosthreeyearsaheadarehigherthanprojectedby6percentagepointsofGDP,onaverage(Figure1.2).Forecasterrorstendtobeevenlargerincasesinwhichdebtisinitiallyprojectedtodecline(Estefania-Floresandothers2023).

Unidentifieddebt—thatis,thechangein

governmentdebtthatisnotexplainedbybudgetarydeficits,interest-growthdifferentials,andexchangeratemovements—islargeandoftenakeydriverof

1Decompositionofgovernmentdebtratiosfor2024?29into

theirmacroeconomicdriversshowsthatinterest-growthdifferentials

areprojectedtocontinuetosupportdebtreductiononaverage

acrosscountrygroups,butsustainedprimarydeficitsandstock-flowadjustmentswillweighondebt.However,debtdynamicsvaryacrosscountries.Theexpecteddebtstabilizationformanyeconomies,

excludingChinaandtheUnitedStates,ispremisedonstill-favorable

interest-growthdifferentialsandplannedfiscalrestraint.ForChinaandtheUnitedStates,sizablefiscaldeficitsaredrivingtheincreaseindebt.

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Figure1.1.PublicDebt-to-GDPRatio,2000–29

(PercentofGDP)

140

120

100

InterquartilerangeGlobalmedian

Globalaverage

UnitedStates

China

80

60

40

20

Projection

0llL2000051015202529

Source:IMF,WorldEconomicOutlookdatabase.

economic,financial,andpoliticalconditionscanshiftthedistributionoffuturedebt-to-GDPratios.Globaldebt-at-risk,definedastheleveloffuturedebtinanextremeadversescenario,isestimatedtobenearly20percentagepointsofGDPhigherthreeyearsaheadthancurrentWorldEconomicOutlookprojections.

Highcurrentdebtlevelsamplifytheeffectsofweakereconomicgrowthandtighterfinancialconditionsondebt-at-risk.Globalfactors,whichcorrelatewithUSsovereignyieldvolatilityandUSfiscalandmonetarypolicyuncertainty,increasinglydrivethefluctuationsingovernmentborrowingcostsacrosscountries.

Unidentifieddebt,anotherimportantriskforthe

debtoutlook,hasbeenhistoricallylargeaveragingaround1.0?1.5percentofGDPperyear,andupto7percentagepointsofGDPinthewakeoffinancialsystemstress.Thisstemsfromthematerializationofcontingentliabilitiesandfiscalrisksaswellasfromarrears.

?Fiscalpolicytogetdebtundercontrol.Ouranalysisshowsthatcurrentfiscaladjustmentplansfall

shortofwhatisneededtostabilizeorreduce

debtwithhighprobabilityformanycountries.

Cumulativeadjustmentswillneedtobe

3.0–4.5percentofGDPonaverageoverthe

mediumtermtostabilize(orreduce)debtata

highprobability.Themagnitudeofadjustment

neededinmostcountriesisgreaterthanwhatiscurrentlyprojectedandbyhistoricalstandardsformanycountries,especiallyinthosewheredebtisnotprojectedtostabilize.

Newanalysishighlightshowfiscalinstrumentshaveadifferentialimpactondifferenthouseholds

Figure1.2.Three-YearForecastErrorsofPublicDebtProjections,1990–2021

(PercentofGDP)

20

MeanMedian

15

10

5

0

?5LAllcountriesCountriesforwhichdebtis

projectedtodecline

Source:Estefania-Floresandothers2023.

Note:Forecasterrorsaredefinedastheprojecteddebt-to-GDPratiorelativetotherealizedoutcomeforeachcountry.Thebarsshowtheinterquartilerangeatthe

three-yearhorizon.

andthusentailvaryingtrade-offsbetweenoutputandinequality.Awell-designedadjustment—

combiningbothexpenditureandrevenue

measures—cansignificantlymitigatetheadverse

impactsonbothoutputandinequalityandismorelikelytobesociallyacceptable.Keyelementsof

awell-designedadjustmentvaryacrosscountries,

butthepaceofadjustmentshouldbegradualandsustainedtostrikeabalancebetweenfiscalrisksandthestrengthofprivatedemand.Forcountrieswithbenigndebtoutlooks,optimizingfiscalspacewhilemaintainingdebtsustainabilityisapriority.

Strengtheningfiscalgovernanceiscriticaltolimitunidentifieddebt.Greaterbudgettransparencyandcompliancewithfiscalrules—keyelementsofsoundpublicfinances—arefoundtosignificantlymitigatethemanifestationofunidentifieddebtduring

periodsoffinancialstress.

HowAreRisksSurroundingPublicDebtProjectionsDistributed?

Debtforecasts,likeothermacroeconomicprojections,typicallyreflectaverageestimatesofthefuturedebtpathinaneconomy.However,understandingtheuncertaintysurroundingdebtdynamicsrequiresquantifying

bothdownsideandupsideriskstotheforecastandmonitoringtheirevolutionovertime.Thissection

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providesaunifiedframeworkforquantifyingtheriskssurroundingdebtprojectionsandzoomsinontwofactorsthataresalientfordebtrisks:sovereignbondyieldsandunidentifieddebt.

Debt-at-RiskFramework

Thissectionintroducesanoveldebt-at-risk

frameworkforassessingtheroleofeconomic,

financial,andpoliticalfactorsindrivingdebt

dynamics.Theanalysisbuildsonandadvancesthe“growth-at-risk”methodology(Adrian,Boyarchenko,andGiannone2019;Adrianandothers2022),

examiningthedynamicsoftheglobaldebt

distributionoveraprojectionhorizonofonetofiveyears(OnlineAnnex1.1).3Theapproachaugmentsandcomplementsexistingtoolsforexaminingdebtrisksbyfirstgoingbeyondtheproximatedrivers

ofdebt(interest-growthdifferentialsandprimary

balances)toinvestigatesalientunderlyingfactors—suchasfinancialstressorincreaseduncertainty

regardingpolicies—thataffectgovernmentdebtanditsproximatedrivers.4Second,itassesseswhether

thesefactorshaveasymmetricornonlineareffectsonthefuturedistributionofdebt-to-GDP.Theanalysishelpspolicymakersgaugehowdebtcouldriseinahighlyadversescenarioandprovidesthefollowinginsights:

?Observablefinancial,political,andeconomic

conditionspredictdebtrisks,withimpactsvarying

dependingonthetimehorizon.Estimatesofdebt-at-risk—definedasthe95thquantileofprojecteddebt—areobtainedfrompanelquantileregressionsoffuturedebt-to-GDPratiosoncontemporaneousvaluesofthevariablesofinterest(Machadoand

SantosSilva2019;Adrianandothers2022).5

Theanalysisisbasedonasampleof74advancedeconomiesandemergingmarketanddeveloping

3Allonlineannexesareavailableat

/en/Publications/FM

.

4Theanalysiscomplementscurrenttoolsinassessingdebt

vulnerabilities,suchastheIMFSovereignRiskandDebt

SustainabilityFramework(SRDSF).Thedebt-at-riskframework

doesnotexaminedebtsustainabilitybutcomplementsothertoolsbyforecastingempiricallytheprobabilitydistributionoftheglobaldebtpathinawaythatallowsfornonlinearity,asymmetry,andstatedependence.

5Theuseofthe95thquantiletoquantifydebtriskisconsistentwiththegrowth-at-riskliterature(whichusesthe5thquantileofthegrowthdistribution)aswellaswiththebroadervalue-at-riskapproachinfinanceliterature.

economiesaccountingformorethan90percent

ofglobalgovernmentdebt.Figure1.3showsthat

adversefinancialandpoliticaldevelopmentsare

consistentlyassociatedwithhigherdebtrisksup

toaforecasthorizonofthreeyears.6Inparticular,

tighterfinancialconditionsdisproportionatelyaffecttherighttailofthedistributionoffuturedebt(redbarsinFigure1.3,panel1),withthestrongest

effectsseenoverathree-yearhorizon.7Forexample,asignificanttighteninginfinancialconditions—

liketheoneSpainexperiencedin2011—is

associatedwithanincreaseindebt-at-riskofabout3percentagepointsofGDPafterthreeyears.

Thislargelyreflectstheeffectsoftighterfinancial

conditionsonthelefttailofthegrowthdistribution,asadversefinancialconditionsraisedefaultsand

reducelenders’risk-bearingcapacity(October2017GlobalFinancialStabilityReport).

Inaddition,tighterfinancialconditionsare

associatedwithgreater“interestrate-at-risk”—the

95thpercentileoftheinterestratedistribution—inthenearterm,becausehighersovereignyieldsraisedebt-servicingcosts,pushingfuturedebtlevels

upward(LorenzoniandWerning2019).Sovereignspreadsalsosignificantlypredictupsidedebtrisksinthenearterm(onetothreeyears).8Forexample,anincreaseinsovereignspreads—liketheoneobservedinSriLankain2022—isassociatedwithanincreaseindebt-at-riskofabout2percentagepointsofGDPafterthreeyears.Highersovereignyieldsalsoaffectbothgrowth-at-riskandinterest-rate-at-risk.This

isconsistentwiththeliteraturedocumentingthat

highersovereignspreadsraiseborrowingcostsfor

bothhouseholdsandfirms,depressingeconomic

activity(Gourinchas,Phillippon,andVayanos2016;Arellano,Bai,andBocola2017)andevidencethat

sovereignbondmarketshavepricedinotherfactors(forexample,adeclineinproductivity)thatworsendebtdynamics.

6Whileitisnotfeasibletocomparethestatisticalsignificanceofdifferentcoefficientsonthe5th,50th,and95thquantilesinapanelsetting,theresultsplottedinFigure1.3areconsistentacrossvariousforecasthorizonsandcountrysamples.Inaddition,thedistributionofcountry-levelordinaryleastsquarescoefficientsisalsogenerallyrightskewedforthevariablesthatareassociatedwithanasymmetriceffectacrossquantilesofdebt.

7Consistentwiththeliteratureongrowth-at-risk,theconfidencebandsforthemedianand5thpercentile,insomecases,overlapwiththoseforthe95thpercentile.

8Similarresultsareobtainedforsovereignbondyields.

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Figure1.3.QuantileRegressionResults:FutureDebt-to-GDPRatioandFinancial,Political,andEconomicVariables

(Coefficientsonconditioningvariableinpanelquantileregressionsacrossforecasthorizons)

6

4

2

0

?2

1.0

0.8

0.6

0.4

0.2

0

1.FinancialVariables—FinancialConditionsIndex

135Horizon(numberofyearsahead)

4.EconomicVariables—InitialDebtLevels

135Horizon(numberofyearsahead)

5thpercentileMedian95thpercentile

2.FinancialVariables—SovereignSpreads

6

6

4

4

2

2

0

0

?2

?2

135Horizon(numberofyearsahead)

0

0

?2

?2

?4

?4

?6

?6

?8

?8

5.EconomicVariables—PrimaryBalance

135Horizon(numberofyearsahead)

3.PoliticalVariables—SocialUnrest

135Horizon(numberofyearsahead)

6.EconomicVariables—EconomicGrowth

135Horizon(numberofyearsahead)

Source:IMFstaffcalculations.

Note:Thefigureshowstheestimatedcoefficientsfor5th,50th,and95thpercentilesbasedonpanelquantileregressionsonselectedfinancial,political,andeconomicvariablesfor74countriesfortheperiod2009–23.Barsdenoteestimatedcoefficients.Allvariablesexceptforinitialdebtarestandardizedtohaveameanofzeroandastandarddeviationofonetoensurecomparabilityacrosscoefficients.Thewhiskerineachbarshowsthe90percentconfidenceintervalfortheestimatedcoefficient(seeOnlineAnnex1.1fordetails).

Furthermore,economicuncertaintyanduncertaintyregardingpoliciesaffectthedistributionoffuturedebt,withlargereffectsonthelefttail(OnlineAnnex1.1;October2024GlobalFinancialStabilityReport).

Beyondfinancialvariables,politicaldevelopments

suchassocialunrest—measuredasthefrequencyofprotestsreportedinthemedia—raisedebtrisksintheneartermbyraisingeconomicandpolicyuncertainty,andimpactinginvestorsentiment(Barrett,Boulton,andNixon2023)andconsumption(Hadzi-Vaskov,Pienknagura,andRicci2021).9

9Electionsarealsoassociatedwithmoderatelyhigherdebtrisks:

whenanelectiontakesplace,itisassociatedwithbothgrowth-at-riskanddeficit-at-risk(OnlineAnnex1.1).

?Economicfactorshavepersistentandasymmetric

effectsonthedebtdistribution.Resultsshowthattheinitialdebtlevelandprimarybalancehavelong-

lastingandasymmetriceffectsontherighttailofthedistributionoffuturedebt.Higherprimary

balancesreducedebtacrossallquantilesofthedebtdistribution,underscoringthepositiveimpactof

fiscaladjustmentondebtrisks.Furthermore,higherinflationreducesdebt-at-riskinboththeshortandmediumterm(OnlineAnnex1.1).

?Globaldebt-at-riskiscurrentlyelevated,partlyowingtohighdebtlevels.Estimatesfromtheanalysis

areusedtoconstructaconditionalprobability

distributionoffuturedebtfortheworld,aswellasseparatedistributionsforadvancedandemerging

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Figure1.4.GlobalDebt-at-RiskandItsEvolution

(Probabilitydensityofthree-year-aheadgovernmentdebt-to-GDPratio)

0.005

-—-2009-—-20202023

0.004

0.003

0.002

0.000

30

50

70

90

110

130

150

170

0.001o

●

Generalgovernmentgrossdebt(percentofGDP)

Source:IMFstaffcalculations.

Note:Theprobabilitydensityfunctionsareestimatedusingpanelquantileregressionsofthedebt-to-GDPratioonvariouspolitical,economic,andfinancialvariables.The

globalsamplecomprises74countries—accountingformorethan90percentofglobaldebt—forwhichdataontheconditioningvariablesareavailablefrom2009–23.The

quantileestimatesarefittedtoaskewedtdistributionforeveryyearinthesample(seeOnlineAnnex1.1fordetails).

Figure1.5.InitialDebtandDebt-at-Risk

(CoefficientonrealGDPgrowthinpanelquantileregressionsforthree-year-aheaddebt-to-GDPratio)

LowinitialdebtHighinitialdebt

0.5

0

?0.5

?1.0

?1.5

?2.0

5thpercentileMedian95thpercentile

Source:IMFstaffcalculations.

Note:Thefigureshowsestimatedcoefficientsfor5th,50th,and95thpercentiles

basedonpanelquantileregressionsofthedebt-to-GDPratioonrealGDPgrowth

differentiatedbylowinitialdebt(firstquartile)andhighinitialdebt(fourthquartile).Barsdenoteestimatedcoefficients.Whiskersinbarsshow90percentconfidence

intervalsforestimatedcoefficients.

marketanddevelopingeconomies.10Globaldebt-at-riskisestimatedat115percentofGDPthree

yearsahead,about20percentagepointsofGDP

higherthanthe2026projectioninthecurrent

WorldEconomicOutlook(Figure1.4).11Theglobaldebtdistributionisskewedtotherightside,withrisksalsosizableatthe75thpercentileofthe

distribution(7percentagepointshigherthanthebaselineprojection,reaching103percentofGDPthreeyearsahead).Inaddition,debt-at-riskremainsasrightskewedasitwasduringtheglobalfinancialcrisis.12Thisreflectstwomainfactors.First,

debtlevelsarehighernowthanin2009.Second,financialandeconomicfactorshavealargerimpactondebtriskswheninitialdebtlevelsarehigher:

10Theconstructionhasthreesteps:country-specificquantile

estimatesareaggregatedusingGDPweights,theunconditional

distributionisrecenteredaroundthedebtforecastintheWorld

EconomicOutlookdatabase,andtheconditionalglobaldebt

distributionisgeneratedusingtheout-of-samplepredictivepowerofeachconditioningfactor(Crumpandothers2022).

11Globaldebt-at-riskis119percentofGDPfiveyearsahead,

about20percentagepointshigherthancurrentlyprojectedfor2028intheWorldEconomicOutlookdatabase.

12Themodelpredictsmedianglobalpublic-debt-to-GDPratiosof

85percentfor2009versus97percentfor2023.Thecorrespondingpredicted95thquantileofglobalpublicdebtis104percentofGDPfor2009versus115percentfor2023.

aresultconsistentwithliteraturedocumenting

howthedebtdistributionvarieswithdebtlevels(Mian,Straub,andSufi2021).Forexample,

whereasanincreaseingrowthof1percentagepointdecreasesdebt-at-riskthreeyearsaheadbyabout1.3percentagepointsofGDPwhendebtisabove70percentofGDP,theeffectisabout0.5percentagepointofGDPandlesspreciselyestimatedwheninitialdebtislowerthanthat

threshold(Figure1.5).

?Debt-at-riskvariessignificantlyacrosscountries

andcountrygroups.Three-year-aheaddebt-at-risk

isestimatedatabout134percentofGDPfor

advancedeconomiesand88percentforemergingmarketanddevelopingeconomies(Figure1.6),

withimportantdifferencesacrosscountries.For

systemicallyimportantadvancedeconomiessuchastheUnitedStates,inwhichtheprimarydeficitisthelargestdriverofdebt-at-risk,three-year-aheaddebt-at-riskisestimatedtoexceed150percentofGDP,20percentagepointshigherthanthebaselinedebtprojectionintheOctober2024WorldEconomic

Outlook(OnlineAnnexFigure1.1.4;OnlineAnnexTable1.1.2).

Whereasdebt-at-riskinadvancedeconomiesasagrouphasbroadlyretreatedfrompandemicpeaks,ithasincreasedinemergingmarketanddeveloping

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Figure1.6.Debt-at-RiskacrossIncomeGroups

(Probabilitydensityofthree-year-aheadgovernmentdebt-to-GDPratio,2023)

Advancedeconomies(2020)Advancedeconomies(2023)

Emergingmarketanddevelopingeconomies(2020)Emergingmarketanddevelopingeconomies(2023)

0.0060.0050.0040.0030.0020.001

0

7090110130150170

Generalgovernmentgrossdebt(percentofGDP)

3050

Source:IMFstaffcalculations.

Note:Probabilitydensityfunctionsareestimatedusingpanelquantileregressionsofthedebt-to-GDPratioonvariouspolitical,economic,andfinancialvariablesfor2009–23.Thequantileestimatesarefittedtoaskewedt-distributionforeveryyearinthesample.Dotsindicatethepredicted95thquantileofthedebt-to-GDPratioforeachcountrygroup.

Figure1.7.FinancialConditionsandDebt-at-RiskacrossIncomeGroups

(Coefficientsonfinancialconditionsindexforthree-year-aheaddebt-to-GDPratio)

10

8

6

4

2

0

Advancedeconomies

Emergingmarketanddevelopingeconomies

5thpercentileMedian95thpercentile

Source:IMFstaffcalculations.

Note:Thefigureshowsestimatedcoefficientsfor5th,50th,and95thpercentilesbasedonpanelquantileregressionsofthedebt-to-GDPratioonthefinancialconditions

indexforadvancedeconomiesandemergingmarketanddevelopingeconomies.Barsdenoteestimatedcoefficients.Whiskersinbarsshow90percentconfidenceintervalsforestimatedcoefficients.

economies.Differencesindebtrisksbetweenthe

twocountrygroupsreflectsaninitialhigherlevelofdebtinadvancedeconomiesandtheheterogeneousimpactofconditioningfactorsacrosscountrygroups.Forexample,financialconditions(asmeasuredby

afinancialconditionsindexandsovereignspreads),socialunrest,andworlduncertaintyhavelarger

medium-termeffectsondebt-at-riskinemerging

marketanddevelopingeconomiesthaninadvancedeconomies,consistentwithrecentempiricalevidencethatfindstheformertobelessresilienttofinancial

(Ahirandothers2023)anduncertaintyshocks(Ahir,Bloom,andFurceri2022)(Figure1.7).Theanalysisalsofindsthatahigherprimarybalanceisassociatedwithlowerdebt-at-risk,especiallywhencountries

havefiscalrulesinplace,aswell-designedfiscalrulesmitigatetheriskoffiscalslippages(Figure1.8).

Model-estimateddebt-at-riskdoesnotfully

reflectmountingspendingpressuresarisingfrom

thegreentransition,entitlementsrelatedtoaging

andhealthcare,defense,andenergysecurity.Thesecouldexacerbatetheupsideriskstodebtprojections.Forexample,achievingnetzeroemissionsby

midcenturyisexpectedtoincreasegovernmentdebtby10–15percentagepointsofGDPrelativetothebaseline(Garcia-Macia,Lam,andNguyen2024).

Governmentsinemergingmarketeconomiesand

low-incomedevelopingcountriesneedtomakelargeinvestments,ontheorderof3and11percentofGDPperyear,respectively,toclosedevelopmentgapsandmeettheUNSustainableDevelopmentGoals(April

2023FiscalMonitor).Accountingfortheseballooningspendingneedshighlightsthechallengesofreducingdebtrisksinthecomingyears.

Figure1.8.PrimaryBalanceandDebt-at-RiskbyFiscalRules

(Coefficientsonprimarybalanceforthree-year-aheaddebt-to-GDPratio)

No?scalrule

Fiscalrule1

0

?1

?2LL5thpercentileMedian95thpercentile

Source:IMFstaffcalculations.

Note:Thefigureshowsestimatedcoefficientsforthe5th,50th,and95thpercentiles

basedonpanelquantileregressions(OnlineAnnex1.1).Itshowstheresultsforthe

primarybalanceforcountry-yearsinwhichfiscalrulesareinplaceversusthoseinwhichtheyarenot.Whiskersinbarsshow90percentconfidenceintervalsforestimated

coefficients.

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Figure1.9.StrongCo-movementsofSovereignBondYields

(Percent)

10-yearbond(advancedeconomies)

10-yearbond(localcurrency;emergingmarketanddevelopingeconomies)Foreign-currency-denominatedbond(emergingmarketand

developingeconomies)14

12

10

8

6

4

2

0

2005060708091011121314151617181920212223

Sources:GlobalFinancialData;OrganisationforEconomicCo-operationandDevelopment;andIMFstaffcalculations.

Note:Thefigureshowsmediansof10-yearsovereignbondyieldsfor27advanced

economies,10-yearlocalcurrencysovereignbondyieldsfor18emergingmarket

anddevelopingeconomies,andmedianforeigncurrencysovereignbondyieldsfor13emergingm