{
  "title": "Public Debt and Fiscal Vulnerability in the Middle East",
  "publication": "IMF Working Papers, January 1, 2007",
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  "summary": "Public debt in the Middle East increased during the mid-1990s mainly because of fiscal expansions. It decreased in recent years, thanks to high oil revenue, economic growth, some primary non-oil fiscal adjustment, and debt relief.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Public debt in the Middle East increased during the mid-1990s mainly because of fiscal expansions.\n- Public debt decreased in recent years, thanks to high oil revenue, economic growth, some primary non-oil fiscal adjustment, and debt relief.\n- While countries in the Middle East appear to have adequately reacted to high indebtedness in the past, public debt levels remain uncomfortably high in many, particularly non-oil producing countries and middle income oil producers.\n- Non-oil countries adjust mainly by increasing revenues, whereas oil countries adjust expenditure.\n- For non-oil producing countries, substantial fiscal adjustment would be needed to bring debt down to below 50 percent of GDP.\n- Oil producers as a group appear to follow sustainable, though procyclical, fiscal policies.\n- Middle-income (but not high-income) oil producing countries would need to adjust somewhat to bring their policies in line with the permanent oil income benchmark."
    },
    {
      "heading": "Key findings and diagnostics",
      "content": "- Cause of mid-1990s debt increase: fiscal expansions.\n- Recent drivers of debt reduction: high oil revenue; economic growth; some primary non-oil fiscal adjustment; debt relief.\n- Cross-group behavior:\n  - Non-oil producing countries: adjustment primarily via revenue increases.\n  - Oil producing countries: adjustment primarily via expenditure cuts.\n- Debt sustainability assessment:\n  - Non-oil producing countries: require substantial fiscal adjustment to reach debt below 50 percent of GDP.\n  - Oil producers (group level): generally follow sustainable but procyclical fiscal policies.\n  - Middle-income oil producers: need moderate adjustment to align with permanent oil income benchmark; high-income oil producers not identified as needing that adjustment."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Non-oil producing countries: undertake substantial fiscal adjustment focused on revenue measures to reduce public debt toward below 50 percent of GDP.\n- Oil producing countries: consider measures to reduce procyclicality in fiscal policy and align fiscal policy with permanent oil income benchmarks, with particular attention to middle-income oil producers.\n- Continue leveraging economic growth, oil revenues (where applicable), and targeted debt relief as part of comprehensive strategies to reduce public debt.\n\n---\n\n Content in this bundle\n\n- Wp0712\n  - Wp0712 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Wp0712 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/public-debt-and-fiscal-vulnerability-in-the-middle-east-20210"
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    "Authors: Ludvig Söderling, Hanan Morsy, Martin Petri, Martin Hommes, Manal Fouad, Wojciech Maliszewski",
    "Published: January 1, 2007",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451865769.001",
    "Public debt in the Middle East increased during the mid-1990s mainly because of fiscal expansions.",
    "Public debt decreased in recent years, thanks to high oil revenue, economic growth, some primary non-oil fiscal adjustment, and debt relief.",
    "While countries in the Middle East appear to have adequately reacted to high indebtedness in the past, public debt levels remain uncomfortably high in many, particularly non-oil producing countries and middle income oil producers.",
    "Non-oil countries adjust mainly by increasing revenues, whereas oil countries adjust expenditure.",
    "For non-oil producing countries, substantial fiscal adjustment would be needed to bring debt down to below 50 percent of GDP.",
    "Oil producers as a group appear to follow sustainable, though procyclical, fiscal policies.",
    "Middle-income (but not high-income) oil producing countries would need to adjust somewhat to bring their policies in line with the permanent oil income benchmark.",
    "Cause of mid-1990s debt increase: fiscal expansions.",
    "Recent drivers of debt reduction: high oil revenue; economic growth; some primary non-oil fiscal adjustment; debt relief.",
    "Cross-group behavior:",
    "Debt sustainability assessment:",
    "Non-oil producing countries: undertake substantial fiscal adjustment focused on revenue measures to reduce public debt toward below 50 percent of GDP.",
    "Oil producing countries: consider measures to reduce procyclicality in fiscal policy and align fiscal policy with permanent oil income benchmarks, with particular attention to middle-income oil producers.",
    "Continue leveraging economic growth, oil revenues (where applicable), and targeted debt relief as part of comprehensive strategies to reduce public debt.",
    "**Wp0712**"
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