Debt sustainability remains a critical concern for emerging economies, including the BRICS nations (Brazil, Russia, India, China and South Africa). Despite ongoing fiscal consolidation efforts, they continue to struggle with rising debt levels and deficits. While previous studies have explored debt sustainability issues either at the individual country level or collectively using conventional panel methods, this study examines the sustainability of both public and external debt in BRICS nations by applying Bohn’s fiscal reaction function for panel data, estimated through the penalised spline technique. The analysis also determines public debt threshold levels for each country. The results indicate that public debt is sustainable in Brazil, China and South Africa, but is unsustainable in India and Russia. External debt is sustainable only in China and South Africa. The estimated public debt thresholds are 73.90% for Brazil, 20.83% for Russia, 70.44% for India, 37.04% for China and 31.51% for South Africa. These findings provide valuable insights for policymakers, offering guidance on designing strategies to achieve and maintain debt sustainability across BRICS nations.
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