This Budget Brief analyzes the sustainability of National Government (NG) debt in the context of the proposed FY 2027 National Budget. It examines the government’s revised fiscal deficit targets and highlights the departure from the original Medium-Term Fiscal Framework (MTFF), with the debt-to-GDP ratio projected to remain elevated and above the 60% benchmark and to peak at 72.9% of GDP by 2030. This Brief also discusses government’s borrowing strategy, financing requirements, and debt servicing over the medium term.
Using the IMF’s Debt Sustainability Analysis (DSA) framework, the Brief assesses the medium-term debt outlook through projections, debt decomposition, and debt-stabilizing primary balance (DSPB) estimates, and macro-fiscal stress tests. It concludes with an analysis of debt profile vulnerabilities by source, currency, and maturity, and discussion on key policy considerations for strengthening fiscal sustainability and rebuilding fiscal space.