{
  "title": "Measures of Fiscal Risk in Hydrocarbon-Exporting Countries",
  "publication": "IMF Working Papers, October 30, 2012",
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  "summary": "The recent relatively high levels of global oil prices have led to a significant improvement in the public finances of several hydrocarbon-exporting countries. However, despite the increase in fiscal buffers, medium-term risks remain high.",
  "sections": [
    {
      "heading": "Summary and main findings",
      "content": "- Recent relatively high levels of global oil prices have led to a significant improvement in the public finances of several hydrocarbon-exporting countries.\n- Despite the increase in fiscal buffers, medium-term risks remain high.\n- Fiscal vulnerabilities have increased as a consequence of the substantial spending packages implemented in recent years.\n- These spending packages have raised break-even prices—that is, the price levels that ensure that fiscal accounts are in balance at a given level of spending—in these countries.\n- The study develops measures of fiscal risk stemming from oil price fluctuations and provides an empirical application to hydrocarbon-exporting countries from the Middle East and North Africa region.\n- It is noted that countries with large net assets and proven oil reserves are much less vulnerable to fiscal risk than is indicated by standard measures based on break-even prices."
    },
    {
      "heading": "Methodology and scope",
      "content": "- Analysis focuses on fiscal risk arising from oil price fluctuations.\n- The study develops quantitative measures of fiscal risk tied to oil price volatility and break-even price concepts.\n- Empirical application: hydrocarbon-exporting countries from the Middle East and North Africa region.\n- Relevant subjects and keywords identified: Commodity price fluctuations, Commodity prices, Financial institutions, Fiscal risks, Futures, Oil prices, Prices, Public financial management (PFM), break-even, break-even price, break-even prices, breakeven price, fiscal risk, Futures, Global, Middle East, North Africa, oil price, oil prices, price of Brent, spot market, stochastic simulations, volatility."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Authorities in hydrocarbon-exporting countries should account for elevated medium-term fiscal risks despite recent improvements in fiscal positions.\n- Policymakers should consider the impact of past spending packages on current break-even price levels and on fiscal vulnerability.\n- Standard break-even price metrics may overstate fiscal vulnerability for countries with large net assets and proven oil reserves; policy assessments should incorporate net asset positions and reserve valuations when measuring fiscal risk.\n- Measures that explicitly incorporate oil price volatility and stochastic simulations can improve the assessment of fiscal risk and guide buffer accumulation and fiscal policy design.\n\nIMF Working Paper No. 2012/260 by Carlos Caceres and Leandro Medina, October 30, 2012.\n\n---\n\n Content in this bundle\n\n- Annex I: Summary Tables\n  - Annex I: Summary Tables (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Annex I: Summary Tables (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/measures-of-fiscal-risk-in-hydrocarbon-exporting-countries-40093"
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    "Authors: Carlos Caceres, Leandro Medina",
    "Published: October 30, 2012",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475530162.001",
    "Recent relatively high levels of global oil prices have led to a significant improvement in the public finances of several hydrocarbon-exporting countries.",
    "Despite the increase in fiscal buffers, medium-term risks remain high.",
    "Fiscal vulnerabilities have increased as a consequence of the substantial spending packages implemented in recent years.",
    "These spending packages have raised break-even prices—that is, the price levels that ensure that fiscal accounts are in balance at a given level of spending—in these countries.",
    "The study develops measures of fiscal risk stemming from oil price fluctuations and provides an empirical application to hydrocarbon-exporting countries from the Middle East and North Africa region.",
    "It is noted that countries with large net assets and proven oil reserves are much less vulnerable to fiscal risk than is indicated by standard measures based on break-even prices.",
    "Analysis focuses on fiscal risk arising from oil price fluctuations.",
    "The study develops quantitative measures of fiscal risk tied to oil price volatility and break-even price concepts.",
    "Empirical application: hydrocarbon-exporting countries from the Middle East and North Africa region.",
    "Relevant subjects and keywords identified: Commodity price fluctuations, Commodity prices, Financial institutions, Fiscal risks, Futures, Oil prices, Prices, Public financial management (PFM), break-even, break-even price, break-even prices, breakeven price, fiscal risk, Futures, Global, Middle East, North Africa, oil price, oil prices, price of Brent, spot market, stochastic simulations, volatility.",
    "Authorities in hydrocarbon-exporting countries should account for elevated medium-term fiscal risks despite recent improvements in fiscal positions.",
    "Policymakers should consider the impact of past spending packages on current break-even price levels and on fiscal vulnerability.",
    "Standard break-even price metrics may overstate fiscal vulnerability for countries with large net assets and proven oil reserves; policy assessments should incorporate net asset positions and reserve valuations when measuring fiscal risk.",
    "Measures that explicitly incorporate oil price volatility and stochastic simulations can improve the assessment of fiscal risk and guide buffer accumulation and fiscal policy design.",
    "**Annex I: Summary Tables**"
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