Fiscal Policy Sustainability in Oil-Producing Countries
Fiscal Policy Sustainability in Oil-Producing Countries

Author: Ms.Sheila Bassett

Publisher: International Monetary Fund

Published: 1994-11-01

Total Pages: 72

ISBN-13: 1451855850

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Assessing the sustainability of a given fiscal policy is especially important for countries that depend on income from exhaustible resources. Political and growth pressures may push governments to raise expenditure when revenue from exhaustible resources rises, but cutting outlays when price swings reduce income is often difficult. Traditional fiscal accounting may give a misleading view of policy sustainability. This paper argues that for countries in which a significant proportion of government revenue is derived from the exploitation of an exhaustible natural resource, fiscal policy sustainability can best be assessed within a permanent income framework that takes into account total government wealth, including the imputed wealth from reserves of natural resources. Using this framework, the paper takes a sample of six countries where government revenue from petroleum extraction is significant and draws conclusions about the sustainability of their fiscal policies during 1980-92.

Fiscal Policy Sustainability in Oil-Producing Countries
Fiscal Policy Sustainability in Oil-Producing Countries

Author: Claire Liuksila

Publisher:

Published: 2006

Total Pages: 72

ISBN-13:

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Assessing the sustainability of a given fiscal policy is especially important for countries that depend on income from exhaustible resources. Political and growth pressures may push governments to raise expenditure when revenue from exhaustible resources rises, but cutting outlays when price swings reduce income is often difficult. Traditional fiscal accounting may give a misleading view of policy sustainability. This paper argues that for countries in which a significant proportion of government revenue is derived from the exploitation of an exhaustible natural resource, fiscal policy sustainability can best be assessed within a permanent income framework that takes into account total government wealth, including the imputed wealth from reserves of natural resources. Using this framework, the paper takes a sample of six countries where government revenue from petroleum extraction is significant and draws conclusions about the sustainability of their fiscal policies during 1980-92.

Fiscal Policy in Oil Producing Countries During the Recent Oil Price Cycle
Fiscal Policy in Oil Producing Countries During the Recent Oil Price Cycle

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 2010-02-01

Total Pages: 25

ISBN-13: 1451962533

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This paper presents a detailed analysis of the average fiscal policy responses of oil producing countries (OPCs) to the recent oil price cycle. We find that OPCs worsened their non-oil primary balances substantially during 2003-2008 driven by an increase in primary spending. However, this trend was partially reversed when oil prices went down in 2009. We also find evidence that fiscal policy has been procyclical and has hence exacerbated the fluctuations in economic activity. In addition, we estimate that a small reduction in oil prices could lead to very large financing needs in the near future. Finally, we show that long-term fiscal sustainability positions in OPCs have worsened.

Fiscal Policy Formulation and Implementation in Oil-Producing Countries
Fiscal Policy Formulation and Implementation in Oil-Producing Countries

Author: Mr.Jeffrey M. Davis

Publisher: INTERNATIONAL MONETARY FUND

Published: 2003-08-21

Total Pages: 0

ISBN-13: 9781589061750

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Countries with large oil resources can benefit substantially from them. However, despite their huge natural resources, many oil producers have had disappointing growth, widespread poverty, and continuing vulnerability to oil price and other external shocks. Fiscal policy can play a central role indetermining the extent to which a country benefits from its oil wealth. This book brings together studies that provide analysis and findings on fiscal policy issues in oil-producing countries from a diverse international perspective. A key focus for the authors is how to manage oil resources in a way that contributes to a stable macroeconomic environment, sustainable growth, and poverty reduction.

Fiscal Sustainability with Non-Renewable Resources
Fiscal Sustainability with Non-Renewable Resources

Author: Nigel Andrew Chalk

Publisher: International Monetary Fund

Published: 1998-03

Total Pages: 40

ISBN-13:

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This paper seeks to answer the question "what constitutes sustainable fiscal policy in an economy where wealth is derived predominantly from a non-renewable resource?" In particular, the focus is on oil-producing countries. This issue requires an examination of fiscal policies in an explicitly dynamic framework because the current fiscal stance imposes constraints on future fiscal policies. For example, an oil producers fiscal position, as typically measured by the ratio of overall deficit to GDP, can look quite sustainable either fortuitously, because of a temporary rise in the oil price or, if unconstrained by OPEC quotas, because of a deliberate increase in production. However, higher production has consequences beyond the current period since it speeds the depletion of the resource which in turn places greater constraints on future fiscal decisions. In such an economy, conventional fiscal indicators can be deceptive in describing the sustainability of the underlying fiscal position, particularly in the face of volatile world commodity prices

A Primer on Fiscal Analysis in Oil-Producing Countries
A Primer on Fiscal Analysis in Oil-Producing Countries

Author: Daria Zakharova

Publisher: INTERNATIONAL MONETARY FUND

Published: 2009-03-01

Total Pages: 39

ISBN-13: 9781451872033

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This paper proposes an integrated approach to fiscal policy analysis in oil producing countries (OPCs) geared towards addressing their unique and complex policy challenges. First, an accurate assessment of the fiscal stance in OPCs can be obscured by large and volatile oil revenue flows. Second, uncertain and volatile oil revenue flows can complicate the management of macroeconomic policies in these countries. Third, given the exhaustibility of oil reserves, OPCs need to address longer-term sustainability and intergenerational equity issues. The use of non-oil fiscal indicators, stress tests, medium-term frameworks, and permanent oil income models can greatly aid in addressing these challenges.

Fiscal Vulnerability and Sustainability in Oil-Producing Sub-Saharan African Countries
Fiscal Vulnerability and Sustainability in Oil-Producing Sub-Saharan African Countries

Author: Robert York

Publisher:

Published: 2014

Total Pages: 41

ISBN-13:

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Over many years rises and fall of world oil prices have been repeatedly reflected in the boom-bust cycles in oil-exporting countries the world over. The recent spectacular rise and equally spectacular fall in prices provides an opportunity to inquire whether anything is different this time. In this paper we limit the analysis to the experience, outlook, and longterm fiscal policy considerations for eight of the world's oil-producing countries in sub- Saharan Africa. Because we are interested in gauging their fiscal vulnerability and sustainability from the angle of managing exhaustible oil wealth, we focus on the non-oil primary balance as the relevant indicator of how initial conditions and resource endowments can influence long-term considerations in several different models of fiscal rules.