# **Table 10. Real GDP Bounds Test**

## **Bound Test 2: Real Output Shock**

(In percent of GDP, unless otherwise indicated)

||**Actual**||**Pr**|**ojections**|||||
|---|---|---|---|---|---|---|---|---|
||2005|2006|2007|2008|2009|2010|2011||
|||||||||**Debt-stabilizing**|
|**I. Baseline Mediu**|**m-Term Projections**|||||||**primary**|
|||||||||**deficit**|
|Public sector debt 1/|61.2|**71.0**|**93.7**|**107.7**|**122.2**|**137.3**|**152.8**||
|o/w foreign-currency denominated (net)|17.1|21.2|28.8|34.0|41.5|50.9|63.6||
|o/w foreign-currency denominated (gross)|22.7|26.5|33.9|38.9|46.2|55.3|67.8||
|<br>o/w domestic debt (net) 3/|44.1|49.9|64.9|73.7|80.7|86.4|89.1||
|Change in public sector debt|-2.0|9.8|22.7|14.1|14.5|15.1|15.5|0.0|
|Identified debt-creating flows (4+7+12)|-1.7|9.8|22.7|14.1|14.5|15.1|15.5|0.0|
|Primary deficit|-6.5|1.3|10.0|10.0|10.0|10.0|10.0|**-5.8**|
|<br>Revenue and grants|67.2|66.0|65.3|65.3|65.3|65.3|65.3||
|<br>Primary (noninterest) expenditure|60.7|67.3|75.3|75.3|75.3|75.3|75.3||
|<br>Seigniorage|-0.6|0.2|0.3|-0.6|-0.6|-0.6|-0.6|-0.6|
|Automatic debt dynamics 2/|5.5|8.7|12.9|4.6|5.1|5.6|6.0|6.4|
|Contribution from interest rate/growth differential|4.5|8.9|13.0|4.8|5.4|6.0|6.5|7.1|
|Of which contribution from real interest rate|7.4|4.1|7.4|9.2|10.5|11.8|13.1|14.3|
|Contribution from domestic real interest rate 4/|6.2|2.4|5.2|6.7|7.5|8.3|8.8|9.1|
|Contribution from real interest rate on foreign debt 5/|1.6|1.9|2.4|2.7|3.0|3.6|4.3|5.3|
|<br>Contribution from real interest rate on net foreign assets 6/|-0.4|-0.2|-0.1|-0.1|-0.1|-0.1|-0.1|-0.1|
|<br>Of which contribution from real GDP growth|-2.9|4.8|5.5|-4.5|-5.1|-5.8|-6.5|-7.3|
|Contribution from real exchange rate depreciation 7/|0.9|-0.2|-0.1|-0.1|-0.3|-0.3|-0.5|-0.6|
|Other identified debt-creating flows|0.0|-0.5|-0.5|0.0|0.0|0.0|0.0|0.0|
|Privatization receipts (negative)|0.0|-0.5|-0.5|0.0|0.0|0.0|0.0|0.0|
|<br>Recognition of implicit or contingent liabilities|0.0|0.0|0.0|0.0|0.0|0.0|0.0|0.0|
|<br>Other (specify, e.g. bank recapitalization)|0.0|0.0|0.0|0.0|0.0|0.0|0.0|0.0|
|<br>Residual, including asset changes (2-3)|-0.3|0.0|0.0|0.0|0.0|0.0|0.0|0.0|
|Public debt in percent of revenues 1/|91.1|107.7|143.5|165.0|187.2|210.3|233.9||
|Primary deficit that stabilizes the debt-to-GDP ratio|-4.5|-8.5|-12.6|-4.0|-4.5|-5.0|-5.4|-5.8|
|Required deficit reduction|-2.0|9.8|22.7|14.1|14.5|15.1|15.5|15.9|
|**Gross financing**5/|36.9|38.5|59.2|66.2|72.3|77.8|82.1||
|<br>in billions of U.S. dollars|128.9|124.1|181.2|218.3|257.8|300.1|343.9||
|||||||||For debt|
|**Key macroeconomic and fiscal assumptions**||||||||<br>stabilization|
|Real GDP growth (in percent)|4.8|-7.2|-7.2|5.0|5.0|5.0|5.0|5.0|
|Average nominal interest rate on public debt (percent) 6/|15.9|11.0|13.2|13.1|13.1|12.9|12.8||
|Average nominal interest rate on public domestic debt (in percent) 11/|22.0|11.3|14.6|14.6|14.6|14.6|14.6|14.6|
|<br>Average interest rate on foreign-currrency denominated debt|10.3|10.4|10.9|10.9|10.9|10.9|10.9|10.9|
|Average nominal interest rate on NFA (in percent) 12/||5.0|5.0|5.0|5.0|5.0|5.0|5.0|
|<br>Average real interest rate (nominal rate minus change in GDP deflator, percent)|9.1|5.0|8.7|9.7|9.6|9.4|9.3||
|<br>Change in the real exchange rate (Local currency per US dollar) 13/|5.1|-1.0|-0.5|-0.4|-0.8|-0.8|-1.0|-1.0|
|<br>Nominal depreciation of local currency (LC per dollar)|9.3|2.5|1.4|0.5|0.2|0.2|0.0||
|<br>Exchange rate (US dollar per LC)|0.0|0.0|0.0|0.0|0.0|0.0|0.0||
|Nominal appreciation of local currency (increase in US dollar value of local currency)|-8.5|-2.4|-1.4|-0.5|-0.2|-0.2|0.0||
|Inflation rate (in percent)|6.8|6.0|4.5|3.5|3.5|3.5|3.5|3.5|
|US Inflation rate (in percent)|2.7|2.4|2.5|2.5|2.5|2.5|2.5|2.5|
|Growth of real primary spending (deflated by GDP deflator, in percent)|5.9|2.8|3.8|5.0|5.0|5.0|5.0||
|<br>Base Money (percent of GDP)|7.8|7.7|7.7|7.7|7.7|7.7|7.7||

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