Under these scenarios (as it is proven in Annex X and XI), the debt ratio in 2030 for the _baseline_ scenario is defined as: And the debt ratio in 2030 for the _BRI scenario_ is defined as: 1−� � B � B BB where p is the average primary balance ratio, is the average real annual interest rate, B are the growth rates for the baseline and BRI respectively, and represents the debt ratio. More specifically BB<sup>���</sup> B ıı̅ gg̅ a dd gg̅ in the BRI scenario, is the debt ratio which includes all the additional BRI debt financing costs. The dd paper assumes that the total amount of BRI financing is disbursed in five equal tranches over the period BB ii 2019-2023. dd

**The** SGE growth projections rely on a set of estimates that reduce trade time and factor in externalities from improved trade infrastructure and trade reforms. De Soyres et al. (2019) provide eight different growth estimates based on the impact of upgraded trade infrastructure, possible use of multi-modal transport modes, trade facilitation reforms and reduction in tariffs.44 The SGE fully captures the impact of externalities of lower costs of trade among all trading countries as a result of BRI trade investment and institutional and policy reforms. The authors estimate the BRI effects by performing a counterfactual analysis and compare the results to the ex-ante BRI equilibrium. For the purpose of this analysis, we focus only on the upper-bound scenario of de Soyres et al. (2019), which reflects the full impact of trade infrastructure investment, efficiency gains from use of the most efficient trade infrastructure, gains from expected trade policy reforms (including lower tariffs and faster border clearance) and positive network externalities. Annual median growth under the upper bound SGE simulations is 1.2 percentage points higher than the median historical growth used in the baseline.

Figures 16 presents the comparison between the debt ratio in 2016 and 2030, for the baseline and BRI scenarios. In Figure 16, the solid gray line is the 45-degree line. Any point above this line implies that the government will face a larger debt ratio at the end of 2030 relative to 2016. Any point below the solid gray line implies a reduction in debt ratio at the end of 2030. The dashed gray lines represent the debt ratio that is equal to 50 percent, as threshold effects for increased debt vulnerabilities. The analysis is limited to only 30 countries, which presents BRI debt financing (as for the WIND database) and the countries considered in the SGE model.

> 44 de Soyres et al. (2019) provide four different growth estimates for two scenarios. The two scenarios are referred as the “lower-bound” and the “upper-bound”. The “upper-bound” scenario allows for changes in transportation mode due to the new infrastructure, while the “lower-bound” scenario assumes that switching mode of transportation is difficult -allowing for modal changes lower than 5 percent with respect to the pre-BRI modes of transport. The four different growth estimates are derived by considering the: (i) additional BRI infrastructure; (ii) additional BRI infrastructure and tariff reduction; (iii) additional BRI infrastructure and additional reforms that lead to reduced boarded delays; (iv) additional BRI infrastructure, tariff reduction, and additional reforms that lead to reduced boarded delays.

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