mercredi 15 avril 2015
Oil Prices and Public Finances: A Double-Edged Sword
Posted on 18:52 by nice news
Plunging oil prices have taken the public finances on an exciting ride the past six months. Oil prices have fallen about 45 percent since September (see April 2015 World Economic Outlook), putting a big dent in the revenues of oil exporters, while providing oil importers an unexpected windfall. How has the decline in oil prices affected the public finances, and how should oil importers and exporters adjust to this new state of affairs?
In the April 2015 Fiscal Monitor, we argue that the oil price decline provides a golden opportunity to initiate serious energy subsidy and taxation reforms that would lock in savings, improve the public finances and boost long-term economic growth.
A sword that cuts both ways
For oil exporters, the decline in prices is expected to cut their revenues by an average of 4 percent of GDP in 2015. This is reflected in the large deterioration in the fiscal balances of exporters we now predict for 2015 (see chart 1). At the same time, oil importers are benefiting, but with significant variation across regions (see chart 2).
In the April 2015 Fiscal Monitor, we argue that the oil price decline provides a golden opportunity to initiate serious energy subsidy and taxation reforms that would lock in savings, improve the public finances and boost long-term economic growth.
A sword that cuts both ways
For oil exporters, the decline in prices is expected to cut their revenues by an average of 4 percent of GDP in 2015. This is reflected in the large deterioration in the fiscal balances of exporters we now predict for 2015 (see chart 1). At the same time, oil importers are benefiting, but with significant variation across regions (see chart 2).
Oil Prices and Public Finances: A Double-Edged Sword
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