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DEBT RELIEF

Statistics Directorate    
French Equivalent: Allégement de la dette

Definition:
Debt relief is any form of debt reorganisation which relieves the overall burden of debt.

Context:
Debt relief results where there is a reduction in the present value of these debt-service obligations and/or a deferral of the payments due, thus providing smaller near-term debt service obligations. This can be measured, in most cases, by an increase in the duration of these obligations; that is, payments become weighted more toward the latter part of the debt instrument’s life.

However, if debt reorganization results in changes in present value and duration that are countervailing in their impact on the debt burden, then there is no debt relief, unless the net impact is significant—such as could occur if there was a deep reduction in present value (together with small decrease in duration) or a sharp increase in duration (together with a small increase in present value). (IMF, 2003, External Debt Statistics: Guide for Compilers and Users – Appendix III, Glossary, IMF, Washington DC. Available from
http://www.imf.org/external/pubs/ft/eds/Eng/Guide/index.htm).

Source Publication:
Development Assistance Committee (DCA) International Development Statistics – Handbook for Reporting Debt Reorganisation on the DAC Questionnaire.

Hyperlink:
http://www.oecd.org/dac/stats/11181711.pdf

Statistical Theme: Financial statistics

Created on Tuesday, September 25, 2001

Last updated on Monday, June 10, 2013