Debt Optimization Platform

Enhancing fiscal space, reducing costs and risks

Introducing the Debt Optimization Platform

The Debt Optimization Platform, powered by machine learning, presents an opportunity for countries in the Arab region to assess the costs and risks associated with debt portfolios. The platform leverages global market debt data and international debt statistics to analyze debt portfolios and offer insights into cost drivers and risk factors. It enables Governments to compare their debt positions against global benchmarks and explore options for optimizing borrowing terms, managing currency risks, and accessing concessional financing. It also informs the setting of competitive prices in bond issuances. By applying data-driven dynamic simulations, policymakers can make informed decisions to develop actionable debt optimization strategies that contribute to long-term fiscal sustainability while addressing financing needs to meet urgent development and finance the SDGs.

Background

The Arab region faces significant fiscal and debt challenges, exacerbated by the COVID-19 pandemic and a global slowdown in growth and investment. In 2023, the region’s gross public debt reached $1.55 trillion, with particularly high debt burdens in middle- and low-income countries. Rising debt servicing costs and a shift toward market borrowing have further strained government budgets, reducing available resources for sustainable development. As countries struggle to maintain fiscal sustainability, there is an urgent need for optimizing debt portfolios and innovative debt management solutions that can help reduce costs, extend maturities, diversify debt portfolios, and foster inclusive growth, resilience and macroeconomic stability.

Overview

The Debt Optimization Platform is a dynamic interface to help policymakers in the Arab region assess debt optimization strategies, drawing on global debt data and employing machine learning approaches to analyze the costs and risks of debt portfolios. The Platform provides a user-friendly navigation experience to decision-makers, enabling them to visualize debt trends and simulate actionable strategies for their countries vis-à-vis their global peers. This helps to inform the issuance of market debt instruments, manage risks, and explore innovative financing instruments to enhance finance for the Sustainable Development Goals (SDGs).