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Operational Aspects of Fiscal Policy in Oil-Producing Countries
Author:
Mr. Steven A Barnett
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Mr. Rolando Ossowski
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Series:
IMF Working Papers
Volume/Issue:
Volume 2002: Issue 177
Language:
English
Publication Date:
01 Oct 2002
DOI:
https://doi.org/10.5089/9781451858884.001
ISBN:
9781451858884
ISSN:
1018-5941
Pages:
35
Keywords:
WP; oil price; oil revenue; oil deficit; government spending; exchange rate; Oil; petroleum; fiscal policy; oil-producing countries; nonrenewable resources; fiscal sustainability; understanding fiscal policy development; fiscal policy discussion; oil price volatility; spot oil price; non-oil deficit; fiscal policy decision; oil price decline; oil price development; fiscal policy response; price movement; Oil prices; gas and mining taxes
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Oil-producing countries face challenges arising from the fact that oil revenue is exhaustible, volatile, and uncertain, and largely originates from abroad. Reflecting these challenges, the paper proposes some important general principles for the formulation and assessment of fiscal policy in these countries. The main findings can be summarized in some key guidelines: the non-oil balance should feature prominently in the formulation of fiscal policy; it should generally be adjusted gradually; the government should strive to accumulate substantial financial assets over the period of oil production; and, where necessary, strategies should aim at breaking procyclical fiscal responses to volatile oil prices.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund