Macroeconomic Simulation • Based on FT Opinion • 10-Year Horizon Model

Sovereign Debt Restructuring & Yield Stress Simulator

"The world’s approach to sovereign debt needs to change." Test the macroeconomic arithmetic of debt sustainability: evaluate how debt-to-GDP dynamics evolve under principal haircuts, interest rate reductions, primary fiscal surpluses, and real growth shocks.

Select Policy Preset:

Restructuring Parameters

Initial Debt-to-GDP 85.5%

Total outstanding general government gross debt as % of national GDP.

Principal Haircut 15.0%

Face value reduction applied to existing commercial & bilateral bonds.

Average Effective Coupon / Yield 7.2%

Nominal effective interest cost on newly issued replacement securities.

Projected Real GDP Growth 2.4%

Annual average real output expansion over the 10-year projection horizon.

Primary Fiscal Balance (% GDP) -2.1%

Government balance excluding interest payments. Deficit (-), Surplus (+).

Average Maturity 6.5 Years

Duration profile influencing annual principal rollover requirements.

Restructuring Implementation Year 2

Timeline checkpoint where haircuts and coupon reductions take effect.

10-Yr Debt-to-GDP

68.4%

Baseline: 104.2%

Default Risk Status

Moderate Risk

Sustainability index evaluated

Debt Service Savings

$42.5B

Cum. interest & principal relief

Sustainability Score

78 / 100

IMF / World Bank benchmark

10-Year Macroeconomic Debt Path Projections

Baseline (No Restructuring)

Restructured Relief Path

Critical Threshold (70%)

Annual Trajectory & Fiscal Breakdown

Horizon	Baseline Debt %	Restructured Debt %	Relief Spread	Annual Service Savings	Primary Gap