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Impact of fuel subsidies on economic growth in energy-exporting countries: analysis with panel data

Author

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  • Samir Laissouf

    (Faculty of Economics, Business Studies and Management, University of Abou Bekr Belkaid Tlemcen, Algeria)

  • Kamel Lahouel

    (Faculty of Economics, Business Studies and Management, University of Abou Bekr Belkaid Tlemcen, Algeria)

Abstract

Subject and purpose of work This study aims to measure the impact of fuel subsidy on economic growth in 2010-2020. Materials and methodsThe panel model was used in the study to calculate the variables of fuel subsidies as a percentage of GDP and annual GDP growth per person for 11 energy producers and exporters. Resultsthe study showed that fuel subsidies had a significant adverse effect on economic growth, with a 1% increase in fuel subsidies leading to a 0.19% drop in growth in the sample nations. Conclusions The findings are consistent with previous studies results and support the view that the policy of fuel subsidies hurts economic growth channels. This study attempted to measure fuel subsidies using the price GAP approach, which allows for estimating the levels of internal energy prices and specific reference prices, such as international energy prices or the price of production cost recovery.

Suggested Citation

  • Samir Laissouf & Kamel Lahouel, 2025. "Impact of fuel subsidies on economic growth in energy-exporting countries: analysis with panel data," Economic and Regional Studies / Studia Ekonomiczne i Regionalne, Sciendo, vol. 18(1), pages 36-46.
    • Handle: RePEc:vrs:ecoreg:v:18:y:2025:i:1:p:36-46:n:1004
    DOI: 10.2478/ers-2025-0004
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    More about this item

    Keywords

    economic growth; Panel data; fuel subsidy; energy-exporting countries;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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