Operational Aspects of Fiscal Policy in Oil-Producing Countries
AbstractOil-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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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 02/177.
Date of creation: 01 Oct 2002
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