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Middle East and Central Asia > Oman

You are looking at 1 - 10 of 34 items for :

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Cover IMF Working Papers
Cross-Border Risks of a Global Economy in Mid-Transition
Etienne Espagne
,
William Oman
,
Jean-François Mercure
,
Romain Svartzman
,
Ulrich Volz
,
Hector Pollitt
,
Gregor Semieniuk
, and
Emanuele Campiglio
This paper analyzes the cross-border risks that could result from a decarbonization of the world economy. We develop a typology of cross-border risks and their respective channels. Our qualitative and quantitative scenario analysis suggests that the mid-transition – a period during which fossil-fuel and low-carbon energy systems co-exist and transform at a rapid pace – could have profound stability and resilience implications for global trade and the international financial system.
Keywords:
Climate change; transition risks; cross-border risks; trade; international money and finance.; asset purchase; energy export; baseline export; baseline GDP; cost of capital; Non-renewable resources; Climate policy; Exports; Global
Cover IMF Working Papers
How Persistent are Climate-Related Price Shocks? Implications for Monetary Policy
Alain N. Kabundi
,
Mr. Montfort Mlachila
, and
Jiaxiong Yao
Climate change is likely to lead to more frequent and more severe supply and demand shocks that will present a challenge to monetary policy formulation. The main objective of the paper is to investigate how climate shocks affect consumer prices in a broad range of countries over a long period using local projection methods. It finds that the impact of climate shocks on inflation depends on the type and intensity of shocks, country income level, and monetary policy regime. Specifically, droughts tend to have the highest overall positive impact on inflation, reflecting rising food prices. Interestingly, floods tend to have a dampening impact on inflation, pointing to the predominance of demand shocks in this case. Over the long run, the dominant monetary policy paradigm of flexible inflation targeting faced with supply-induced climate shocks may become increasingly ineffective, especially in LIDCs. More research is needed to find viable alternative monetary policy frameworks.
Keywords:
climate change; monetary policy; monetary policy models; food price inflation drought; monetary policy paradigm; supply and demand shock; IMF working paper 22/207; IT country; Natural disasters; Inflation; Monetary policy frameworks; Global; Caribbean
Cover IMF Working Papers
Inflation-at-Risk in in the Middle East, North Africa, and Central Asia
Mr. Maximilien Queyranne
,
Romain Lafarguette
, and
Kubi Johnson
This paper investigates inflation risks for 12 Middle East and Central Asia countries, with an equal share of commodities exporters and importers. The empirical strategy leverages the recent developments in the estimation of macroeconomic risks and uses a semi-parametric approach that balances well flexibility and robustness for density projections. The paper uncovers interesting features of inflation dynamics in the region, including the role of backward versus forward-looking drivers, non-linearities, and heterogeneous and delayed exchange rate pass-through. The results have important implications for the conduct of monetary policy and central bank communication in the Middle East and Central Asia and emerging markets in general.
Keywords:
Emerging markets; inflation; inflation expectations; Phillips Curve; monetary policy; central bank communication; Middle East; North Africa; Central Asia; inflation expectation; inflation risk; self-reinforcing inflation dynamics; baseline inflation forecast; fan chart; Commodity prices; Output gap; Exchange rates; Consumer price indexes; Middle East and Central Asia
Cover IMF Working Papers
Climate Action to Unlock the Inclusive Growth Story of the 21st Century
Amar Bhattacharya
,
Maksym Ivanyna
,
William Oman
, and
Nicholas Stern
Climate change is a major threat to the sustainability and inclusiveness of our societies, and to the planet’s habitability. A just transition to a low-carbon economy is the only viable way forward. This paper reviews the climate change challenge. It stresses the criticality of systems changes (energy, transport, urban, land use, water) in a climate-challenged world, and the importance of infrastructure investment geared toward such systems changes. The key policies to enable the transition are: public spending on and investment frameworks for sustainable infrastructure, pricing carbon, regulations, promoting sustainable use of natural resources, scaling up and aligning finance with climate objectives, low-carbon industrial and innovation policies, building resilience and adaptation, better measurement of well-being and sustainability, and providing information and education on climate risks. Implemented well, climate action would unlock the inclusive growth story of the 21st century, making our societies more sustainable, inclusive, and prosperous.
Keywords:
climate change challenge; climate change mitigation; low-carbon economy; climate action; challenge of climate change; Climate change; Natural disasters; Greenhouse gas emissions; Global; South Asia
Cover IMF Working Papers
Commodity Shocks and Exchange Rate Regimes: Implications for the Caribbean Commodity Exporters
Mr. Ali J Al-Sadiq
and
Ms. Inci Ötker
Declining commodity prices during mid-2014-2016 posed significant challenges to commodity-exporting economies. The severe terms of trade shock associated with a sharp fall in world commodity prices have raised anew questions about the viability of pegged exchange rate regimes. More recently, the COVID-19 pandemic and the measures needed to contain its spread have been associated with a significant disruption in several economic sectors, in particular, travel, tourism, and hospitality industry, adding to the downward pressure on commodity prices, a sharp fall in foreign exchange earnings, and depressed economic activity in most commodity exporters. This paper reviews country experiences with different exchange rate regimes in coping with commodity price shocks and explores the role of flexible exchange rates as a shock absorber, analyzing the macroeconomic impact of adverse term-of-trade shocks under different regimes using event study and panel vector autoregression techniques. It also analyzes, conceptually and empirically, policy and technical considerations in making exchange rate regime choices and discusses the supporting policies that should accompany a given regime choice to make that choice sustainable. It offers lessons that could be helpful to the Caribbean commodity-exporters.
Keywords:
commodity shock; commodity exporter; regime choice; Caribbean commodity-exporter; I. commodity terms-of-trade Index; Exchange rate arrangements; Exchange rate flexibility; Exchange rates; Exchange rate adjustments; Caribbean; Global; Africa
Cover IMF Working Papers
Saudi’s Growth and Financial Spillovers to Other GCC Countries: An Empirical Analysis
Mr. Olumuyiwa S Adedeji
,
Mr. Sohaib Shahid
, and
Ling Zhu
This paper examines real and financial linkages between Saudi Arabia and other GCC countries. Growth spillovers from Saudi Arabia to Bahrain are found to be sizeable and statistically significant, but those to other GCC countries are not found to be significant. Equity market movements in Saudi Arabia are found to have significant implications for other GCC countries, while there is no evidence of co-movements in bonds markets. These findings suggest some degree of interdependence among GCC countries.
Keywords:
WP; GCC country; GCC sovereign bond market spillover; Growth; Gulf Corporation Council; Spillovers; growth shock; equity market movement; GCC bond spread; GCC equity; Stock markets; Yield curve; Sovereign bonds; Oil prices; Global
Cover IMF Working Papers
Fiscal Adjustment in the Gulf Countries: Less Costly than Previously Thought
Mr. Armand P Fouejieu
,
Mr. Sergio L. Rodriguez
, and
Mr. Sohaib Shahid
This paper estimates fiscal multipliers for the Gulf Cooperation Council (GCC) countries. Using OLS panel fixed effects on a sample of six countries from 1990-2016, results indicate that GCC fiscal multipliers have declined in recent years which would make the on-going fiscal consolidation less costly than previously thought. Though both capital and current multipliers have declined in recent years, capital multipliers are larger than current multipliers, which implies that reducing (less productive) current spending will help limit the adverse impact of such measures on growth.
Keywords:
WP; government spending; GDP; multiplier; Fiscal Policy; Fiscal Multiplier; GCC; oil GDP; GCC country; spending multiplier; tourism expenditure; spending growth; Capital spending; Current spending; Fiscal multipliers; Fiscal consolidation; Global
Cover IMF Working Papers
Oil Prices and GCC Stock Markets: New Evidence from Smooth Transition Models
Nidhaleddine Ben Cheikh
,
Samy Ben Naceur
,
Mr. Oussama Kanaan
, and
Christophe Rault
Our paper examines the effect of oil price changes on Gulf Cooperation Council (GCC) stock markets using nonlinear smooth transition regression (STR) models. Contrary to conventional wisdom, our empirical results reveal that GCC stock markets do not have similar sensitivities to oil price changes. We document the presence of stock market returns’ asymmetric reactions in some GCC countries, but not for others. In Kuwait’s case, negative oil price changes exert larger impacts on stock returns than positive oil price changes. When considering the asymmetry with respect to the magnitude of oil price variation, we find that Oman’s and Qatar’s stock markets are more sensitive to large oil price changes than to small ones. Our results highlight the importance of economic stabilization and reform policies that can potentially reduce the sensitivity of stock returns to oil price changes, especially with regard to the existence of asymmetric behavior.
Keywords:
WP; oil price change; GCC country; correlation coefficient; GCC stock markets; oil prices; smooth transition regression models; GCC stock price volatility; hedging strategy; Stock markets; Asset prices; Oil; Stocks; Global
Cover IMF Working Papers
The Impact of Oil Prices on the Banking System in the GCC
Padamja Khandelwal
,
Mr. Ken Miyajima
, and
Mr. Andre O Santos
This paper examines the links between global oil price movements and macroeconomic and financial developments in the GCC. Using a range of multivariate panel approaches, including a panel vector autoregression approach, it finds strong empirical evidence of feedback loops between oil price movements, bank balance sheets, and asset prices. Empirical evidence also suggests that bank capital and provisioning have behaved countercyclically through the cycle.
Keywords:
WP; NPL ratio; oil price; price growth; GCC bank; Macro-financial linkages; nonperforming loans; panel vector autoregression; asset price appreciation; bank asset quality; Oil prices; Credit; Financial cycles; Capital adequacy requirements; Global
Cover IMF Working Papers
Measuring Concentration Risk - A Partial Portfolio Approach
Pierpaolo Grippa
and
Lucyna Gornicka
Concentration risk is an important feature of many banking sectors, especially in emerging and small economies. Under the Basel Framework, Pillar 1 capital requirements for credit risk do not cover concentration risk, and those calculated under the Internal Ratings Based (IRB) approach explicitly exclude it. Banks are expected to compensate for this by autonomously estimating and setting aside appropriate capital buffers, which supervisors are required to assess and possibly challenge within the Pillar 2 process. Inadequate reflection of this risk can lead to insufficient capital levels even when the capital ratios seem high. We propose a flexible technique, based on a combination of “full” credit portfolio modeling and asymptotic results, to calculate capital requirements for name and sector concentration risk in banks’ portfolios. The proposed approach lends itself to be used in bilateral surveillance, as a potential area for technical assistance on banking supervision, and as a policy tool to gauge the degree of concentration risk in different banking systems.
Keywords:
WP; risk factor; concentration risk; Basel capital requirements; Pillar 2; Credit VaR; capital charge; bank portfolio; asset correlation; Basel capital framework; requirement formula; Credit risk; Credit; Asset valuation; Basel II; Vector autoregression; Global