Oil exporters yet to recover from 2014 price shock: IMF

Christine Lagarde

Chennai: Public debt has rapidly increased in many Arab countries since the 2008 global financial crisis, due to persistently high budget deficits, the International Monetary Fund (IMF) warned on Saturday.

“Unfortunately, the region has yet to fully recover from the global financial crisis and other big economic dislocations over the past decade,” managing director, IMF, Christine Lagarde said.

“Among oil importers, (economic) growth has picked up, but it is still below pre-crisis levels,” she said.

Lagarde stated that public debt among Arab oil importing nations had increased from 64 per cent to 85 per cent of GDP in the decade. Nearly half of these countries now have public debt of over 90 per cent of GDP, she said.

Public debt among oil exporters — including the six-nation Gulf Cooperation Council — rose from 13 per cent of GDP to 33 per cent of GDP, accelerated by the crash in oil prices around five years ago, Lagarde said.

“The oil exporters have not fully recovered from the dramatic oil price shock of 2014,” she said and added that modest growth continues, but the outlook is highly uncertain.

Lagarde said oil producing countries should look to renewable energy in the coming decades, in line with the Paris Agreement on climate change, which stipulates a reduction in greenhouse emissions.

The IMF last month lowered its economic growth forecasts for Saudi Arabia — the world’s top crude exporter — and the wider Middle East and North Africa region due to a renewed fall in oil prices, low output and geopolitical tensions.

NT Bureau