Weathering the Storm So Far : The Impact of the 2003–05 Oil Shock on Low-Income Countries

Author/Editor:

Helaway Tadesse ; Mark W Lewis ; Jörg Zeuner ; James A John ; Luzmaria Monasi ; Paolo Dudine

Publication Date:

July 1, 2006

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper examines the impact of the 2003-05 oil price increase on the balance of payments positions and IMF financing needs of low-income country oil importers. It finds that stronger exports reflecting favorable global conditions, a compression of oil import volumes due to the pass-through of world prices to domestic consumers, and a large increase in capital inflows helped low-income countries cope with the oil price shock. Preliminary data suggest that reductions in oil import volumes have not harmed growth. While fiscal balances generally improved, quasi-fiscal liabilities may be building. Lower demand for IMF assistance may reflect broader trends, but further oil price increases could put pressure on additional countries in 2006 and beyond.

Series:

Working Paper No. 06/171

Subject:

English

Publication Date:

July 1, 2006

ISBN/ISSN:

9781451864311/1018-5941

Stock No:

WPIEA2006171

Format:

Paper

Pages:

33

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