There are four components to the index:
• Fiscal Space, with a 40% weight, examines several macroeconomic factors that could lead to a debt path that is unsustainable.
• External Finance Position, with a 20%weight, examines the vulnerability of a country to external shocks.
• Willingness to Pay, with a 30% weight, measures how a country’s institutions can handle debt payment.
• Financial Sector Health, with a 10% weight, measures the risk exposure that the private sector banks impose on the country’s financial health.