Debt Sustainability Analysis: Indicators and Assessment

Inflation rate is not a key indicator of debt sustainability, as it does not directly measure the government's ability to repay its debt.

A debt-to-GDP ratio of 60% is generally considered to be moderately sustainable, as it is above the safe threshold of 40% but below the unsustainable threshold of 80%.

Political stability is not a direct factor that can affect a country's debt sustainability, as it does not directly impact the government's ability to repay its debt.

The interest-to-revenue ratio measures the government's debt burden, as it shows how much of the government's revenue is used to pay interest on its debt.

A current account deficit can lead to increased foreign debt, depreciation of the currency, and higher inflation.

Cash flow analysis is not a common method for assessing debt sustainability, as it is more commonly used for assessing the financial health of a company.

Scenario analysis is used to assess the impact of different economic scenarios on a country's debt sustainability, identify potential risks to debt sustainability, and develop strategies to improve debt sustainability.

Current account balance is not a common indicator of external debt sustainability, as it is more commonly used for assessing a country's overall economic health.

The debt service-to-export ratio measures the government's external debt burden, as it shows how much of the country's export earnings are used to pay interest and principal on its external debt.

Inflation targeting is not a common strategy for improving debt sustainability, as it is more commonly used for achieving price stability.

Fiscal consolidation involves both reducing government spending and increasing government revenue in order to reduce the fiscal deficit and improve debt sustainability.

Debt restructuring involves rescheduling the repayment of debt, reducing the interest rate on debt, and/or forgiving a portion of debt.

Dynamic analysis is not a common type of debt sustainability analysis, as it is more commonly used for assessing the long-term impact of different policies on the economy.

Stochastic analysis is used to assess the impact of random shocks on a country's debt sustainability, identify potential risks to debt sustainability, and develop strategies to improve debt sustainability.

Human capital index is not a common type of debt sustainability indicator, as it is more commonly used for assessing a country's overall economic development.