Is the External Debt of Tunisia Sustainable? Cointegration Based Analysis
Keywords:external debt sustainability, budgetary deficit .
Foreign capital contribution can have dramatic consequences if the evolution of the external debt is not profitable. Monitoring the external debt of low-income countries and emerging economies is compulsory. The use of monitoring tools based on different approaches in terms of empirical testing is useful for studying the dynamics of debt and assessing its sustainability. We propose to apply the two approaches assessing the sustainability of external debt in Tunisia. The approach based on the assessment of an accounting officer reveals non-debt sustainability; yet, two versions of the actuarial approach confirm the opposite. Adequate budgetary management improves the performance of the debt when it is not affected by common consumption.
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