Balancing Investment with Debt Sustainability
There is a perception that public debt levels and risks are increasing across the world, eroding the fiscal space available to fund development spending, especially for infrastructure, but is it also the case in Asia? A review of the sovereign debt and credit risk picture in Asia finds that debt risks remain generally low and credit profiles are generally healthy, even though there may be some specific vulnerabilities, especially amongst smaller countries, that require individual attention. Accordingly, most countries have room to invest more to address their large infrastructure needs. However, in order to maximize investment while keeping debt ratios under control, projects should have demonstrable economic benefits.