The role of the Independent Fiscal Institutions in assessing the sustainability of high public debt in the post-Covid era

Weakened growth along with automatic stabilisers and additional fiscal stimulus are leading to higher public debt levels as a result of the Covid-19 pandemic.

Against this background, this paper aims to assess the role of Independent Fiscal Institutions (IFIs), focusing on their public debt modelling. The paper draws on new data from a review of debt sustainability analysis (DSA) practices in the EU and a survey of members of the Network. More specifically, it explores the main challenges for IFIs in modelling public debt in times of greater unpredictability, higher public debt and low interest rates.

Drawing on the experiences of various IFIs, the paper comes up with preliminary insights into how to address these challenges.