This Fiscal and Debt Sustainability Note, the first module of a programmatic multisectoral Public Expenditure Review (PER), reviews the recent macro-fiscal challenges, analyzes their causes and consequences and provide policy options for enhancing the conduct of fiscal and PFM policies in the country. The first part of this module draws on the Boost database to provide a comprehensive overview of the budget covering both revenues and expenditures. It analyzes the composition of the budget (based on economic and functional classifications) and discusses the most critical PFM issues the country faces. It also assesses budget execution and the efficiency of public expenditure. The second part of the module focuses on fiscal risks and their implications for medium-term fiscal and debt sustainability. It examines the recent evolution of public debt, its main drivers and relationship to economic growth. It describes recent reforms to address fiscal and debt vulnerabilities and how these reforms have been affected by the global pandemic. It also analyzes the main fiscal risks with a focus on those stemming from State-Own Enterprises (SOEs), local councils, litigations, natural disasters, and health crises. This part uses simulations to analyze the most likely evolution of the public debt path over the next 20 years under alternative risk scenarios. Finally, the module proposes practical and actionable policy options to help improve the macro-fiscal environment over the short term and preserve debt sustainability over the medium term.