Debt Sustainability Framework

The Debt Sustainability Framework is a tool used by organizations like the IMF to assess if a country's debt level is manageable over the long term. It evaluates whether a country's future income can reliably cover its debt payments without needing excessive borrowing or facing default. By analyzing economic factors such as growth, revenues, and existing debt, the framework helps determine if current debt levels are sustainable or if adjustments—like debt relief or policy changes—are needed to ensure financial stability and prevent crises.