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IMF Lagarde says oil exporters have not fully recovered from shock

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Staff Writer |
Christine Lagarde
World   Christine Lagarde, the managing director of the IMF

Oil exporters have not fully recovered from the dramatic oil price shock of 2014, the head of the IMF said, and she cautioned against spending money on "white elephant projects".

"With revenues down, fiscal deficits are only slowly declining, despite significant reforms on both the spending and revenue sides, including the introduction of VAT and excise taxes," Christine Lagarde, the managing director of the IMF, told a conference in Dubai.

"This has led to a sharp increase in public debt, from 13 percent of GDP in 2013 to 33 percent in 2018."

Lagarde said the uncertainty in the growth outlook for oil exporters also reflected moves by countries to shift rapidly toward renewable energy over the new few decades, in line with the Paris climate change pact.

She said there was scope to improve fiscal frameworks in the Middle East with some of the weaknesses emanating from "short-termism and insufficient credibility".

Lagarde said governments in the region might be tempted to favour white elephant projects instead of investment in people and productive potential.


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